RealEstateConsumerInfo.com: March 2010

We home inspectors are processing a huge amount of information as we pass through a house. Distractions can lead to the inspector forgetting something or making a mistake. While most inspectors use a checklist of some type, part of the job is intuitive and there is lots of data to record and any number of curve balls might be thrown at us along the way. Sellers who bring the wild kids along and, while the inspector concentrates, various underage family members tinker with things --- like the burners on the range -- can be a real risk as well.

There are situations that are out of the "norm." Situations where a homeowner has something setup differently than the average homeowner can be a sign of rough waters. You know, the fire-door to the garage is propped open for the pet raccoon, duct tape keeps the broken furnace cover in place. These oddities, and trying to get things back as they were, can drive an inspector to drinking. I had one the other day where it took me, and the realtor, ten minutes to get the hot water shutoff to a tub. I know it was like that before I began, but nobody provided a warning.

Sometimes the inspector has to connect the dots to cover the rear appendage. Case in point: Cat. Some people teach the cat to use the toilet. Clue: green insert and kitty litter.

I have no clue where said cat was. I know he was in the house because I saw a flash of orange when I was on the outside. Once inside, he was hiding from me.

Most homeowners want the lid left down on the toilet. Inspectors get used to doing that as a courtesy. I was done inspecting this first toilet of three and I put the lid down. Then I saw, psychic abilities on my part, a potential "stupid home inspector" complaint in my future. 

Fact: Despite the cat's low indoor profile, there was a cat lurking nearby. And this was a smart cat, obviously a reader and a doer -- a cat of action.

I had to assume that he was used to indoor plumbing because, despite my seeing a scratching post and food and toys, I saw no kitty litter box. If I was to, in my absent-minded delirium, close the lid on this critically situated toilet, I would be putting the cat's urinary tract and digestive system under duress. And, if the cat decided to go elsewhere, I could visualize the call in my future.

The phone rings, and I answer: "Hey you inspected my house and you owe me a new rug and a new hardwood floor. And, frankly, the poor kitty needs mental health counseling. What kind of dummy are you? My cat uses the toilet in the master bath, has for months now, and you put the lid down. You are such a moron, couldn't you figure that one out? I hope you are insured and have deep pockets because this is going to cost you a pretty penny."

This sounds far fetched, and probably is, but anyone who has been doing this for a few years knows that homeowners think that inspectors are psychic and can foresee all future eventualities, even when the homeowner has some odd ball situation at his or her house. I could have dodged a nearly invisible bullet that time. This is not a profession for those who are easily rattled or stressed-out by accusations or controversy.

Thanks for stopping by,

Steven L. Smith

BE YOUR OWN DENTIST!  Yes, you read that correctly...you too can be your own dentist!  Simply join this network and we will teach you all of the ins and outs of personal dentistry!  Tooth extraction made easy!  Root canals done cheap!  Cavities filled for pennies!,

OK, so I have your attention and with good reason to make my point.  The next time you decide to sell your home yourself or perhaps build your home yourself, you need to make sure that you really know what you are doing.  I for one would never want to be my own dentist and am amazed at the number of people who think selling a home is so simple that anyone can do it.

Before you decide to sell on your own, think about these points:

• Do you have the correct market data in order to correctly price your home?
• Have you had training to know how to negotiate through a contract?
• Are you aware of the importance of the Seller's Disclosures and the legal implications of that form?
• Most buyers of FSBO's expect to pay much less and the Seller can typically expect to get 15% less for their home because of this.
• Are you willing to allow just anyone into your home?  Have they been pre-qualified?  Do you know anything about them?  Could they be just checking your home out to come back and possibly rob you?
• Do you have the time that it takes to market your home, show your home and deal with all of the little details to get to a closing?

These are just a few things to consider when thinking about being your own Realtor.  Realtors are not the enemy.  We are here because we love what we do and our client's best interests are always at the top of our priorities.  Realtors have also spent a great deal of time and money to become licensed and to remain at the top of their field just as any other professional does.

I would be happy to help you sell or buy a home or commercial business.  Call me today for a great real estate experience!  Bandier Realty Partners, LLC can help you find a home, land, farm or ranch or even a high-rise office building!

Paula L. Hamilton ~ Broker/Director

    

Copyright 2010 Paula Hamilton

Buying a condominium unit can be more involved than buying a single family home. This is because you have to worry about both the unit itself and the condominium project as a whole.

10 Questions You Must Ask Before Purchasing A Condominium Unit

To borrow from a famous phrase, not all condominiums are created equally. Some condominiums are very well run; some are quite poorly run and underfunded. Buyers interested in purchasing a condominium unit must do their homework:  not only about the condition of the individual unit they are interested in purchasing, but on the financial health and governance of the condominium as a whole. Remember, you are buying into the entire project as much as you are the unit, and your decision will impact your daily living and your ability to re-sell.

Here are the 10 questions buyers should ask when deciding to purchase a condominium unit:

1. What is the monthly condominium fee and what does it pay for? The monthly condominium fee can range quite dramatically from condominium to condominium. The fee is a by-product of the number of units, the annual expenses to maintain the common area, whether the condo is professionally managed or self-managed, the age and condition of the project, and other variables such as litigation. For budgeting and financing you need to know the monthly fee and exactly what you are getting for it.
2. What are the condominium rules & regulations? Condominium rules can prohibit pets, your ability to rent out the unit, and perform renovations. Make sure you carefully review the rules and regulations before buying.  Needless to say, the buyer's attorney should review and approval all condominium documents, including the master deed, declaration of trust/by-laws, covenants, unit deed and floor plans to ensure compliance with state condominium laws as well as Fannie Mae and FHA guidelines, as necessary.
   
3. How much money is in the capital reserve account and how much is funded annually? The capital reserve fund is like an insurance policy for the inevitable capital repairs every building requires. As a general rule, the fund should contain at least 10% of the annual revenue budget, and in the case of older projects, even more. If the capital reserve account is poorly funded, there is a higher risk of a special assessment.  Get a copy of the last 2 years budget, the current reserve account funding level and any capital reserve study.
   
4. Are there any contemplated or pending special assessments? Special assessments are one time fees for capital improvements payable by every unit owner. Some special assessments can run in the thousands, others like the Boston Harbor Towers $75 Million renovation project, in the millions. You need to be aware if you are buying a special assessment along with your unit.  It's a good idea to ask for the last 2 years of condominium meeting minutes to check what's been going on with the condomininium.
   
5. Is there a professional management company or is the association self-managed? A professional management company, while an added cost, can add great value to a condominium with well run governance and management of common areas.
6. Is the condominium involved in any pending legal actions? Legal disputes between owners, with developers or with the association can signal trouble and a poorly run organization. Legal action equals attorneys’ fees which are payable out of the condominium budget and could result in a special assessment.  In most states, you can run a search of the condominium association in the court database to check if they've been involved in recent lawsuits.
   
7. How many units are owner occupied? A large percentage of renters can create unwanted noise and neighbor issues. It can also raise re-sale and financing  issues with the new Fannie Mae and FHA condominium regulations which limit owner-occupancy rates. If your buyer is using conventional financing, check if it is a Fannie Mae approved condo. If FHA financing, check if it's an FHA approved condo. (Thanks Lou Corcoran for the links) 
   
8. What is the condominium fee delinquency rate? Again, a signal of financial trouble, and Fannie Mae and FHA want to see the rate at 15% or less.
9. Do unit owners have exclusive easements or right to use certain common areas such as porches, decks, storage spaces and parking spaces? Condominiums differ as to how they structure the “ownership” of certain amenities such as roof decks, porches, storage spaces and parking spaces. Sometimes, they are truly “deeded” with the unit, so the unit owner has sole responsibility for maintenance and repairs. Sometimes, they are common areas in which the unit owner has the exclusive right to use, but the maintenance and repair is left with the association.  Review the Master Deed and Unit Deed on this one.
   
10. What Does The Master Insurance Policy Cover? The condominium should have up to $1M or more in coverage under their master condominium policy. For buyer's own protection, they should always buy an individual HO-6 policy covering the interior and contents of the unit, because the master policy and condo by-laws may not cover all damage to their personal possessions and interior damage in case of a roof leak, water pipe burst or other problem arising from a common area element. Ask for a copy of the master insurance policy and don't forget to check the fine print of the by-laws.  Sometimes, there's language that would hurt a unit owner in case of a common area casualty.  Condominiums over 20 units should also have fidelity insurance to protect against embezzlement.

Often a standard condominium questionnaire will answer all or most of these questions. In Mass., where I practice, this isn't required by law, nor is a seller disclosure. If not, be prepared to generate this list and incorporate it into your Offer to Purchase or Purchase and Sale Agreement, as the case may be in your home state. 

Either way, do not have your buyer put earnest money down until satisfactory answers are received.  Good luck and happy condo hunting to you and your buyers!

 

 

Has your short sale or loan modification been turned down and you have no idea why? Let's examine some of the reasons. These reasons may not make you feel any better or maybe they are just excuses by your lender, however there are a few things you may not even know about your loan.

Let's say that you make your mortgage payment to Wells Fargo. You can no longer handle your payments so you ask Wells Fargo to modify your loan- to do a loan modification for you. You are behind in your payments. You are in fact, in foreclosure but you are still living in your home and the judge in your case has not ordered the sale of your home at auction yet. You are scared. You see your neighbors losing their homes all around you. You are hopeful because you see on the news and in the newspapers that the Federal Making Homes Affordable Program has been helping some folks keep their home and get a loan modification.

You are no longer making your mortgage payment because your adjustable rate has been applied and your mortgage payment has gone from $1600 a month to $2300 per month. You just can not make these payments. You have been trying for almost 2 years now to get Wells Fargo to approve your loan modification. You even hired an attorney to help you with your foreclosure defense.

Wells Fargo turns down your loan modification request. You wonder, how could this be? After all, Wells Fargo is one of the large lenders and is participating in the government's Federal Making Homes Affordable program.

But Wells Fargo tells you that the investor is the one that will not allow you to get a loan modification. What in the world is an investor doing making decisions on your loan you wonder. Well, you are not alone in your confusion. Every day we are explaining the whole mortgage note owner thing to buyers agents, real estate agents and homeowners.

Just because you make your house payments to Wells Fargo does not mean they own that note that you are paying on. They are the servicer. Other words you will hear them called are  asset management companies.

The very first thing you need to do before you ask for a loan modification is to find out who actually owns your note. You can do this by calling who you make your mortgage payments to and asking them.

If it is Freddie Mac or Fannie Mae that own your note- you have a much better chance at getting your loan modification approved if you qualify. If it is a private group of investors, your chances go way down. Why would this happen?

One in eight homeowners' loans were sold to investors on Wall Street. What happens is that a bunch of loans are packaged together. These are called mortgage-backed securities. They are then sold off to investors. Homeowners who have mortgage-backed securitized loan are five times more likely to be late on their house payments. Many of these borrowers were given loans they were not qualified for from the beginning. Many of the homeowners getting these loans did not read the fine print and did not realize how high their mortgage payments might go when adjusted.

The rules to allow modifications, short sales and terms of foreclosures and deficiencies are ambiguous at best. Homeowners who are told no by the investor have little recourse.

The federal Making Homes Affordable program lenders who participate in the program must modify all homeowners that qualify. The exception is when the investor has a rule that they do not allow modifications.

The Federal Housing Finance Agency reported to Congress on June 3rd that these securitized mortgages are a "hurdle" to the success of the Making Homes Affordable program. The treasury department has not disclosed why the modifications are denied so there are little to no facts to go on.

Why would the investors say no to your loan modification? Well, Wells Fargo's response is that the investors need their money. Wells Fargo has one situation where the borrowers ( the homeowners) are trying to get their loan modified but Goldman Sachs is the issuer and Deutsche Bank is the trustee. But when you go and talk to these investors and we have on several occasions when doing short sale negotiations for our sellers; the investor passes the buck back to the servicer. For instance, Deutsche Bank says that Wells Fargo is solely responsible for the decision to modify a loan or not.

Some people say that the investors are the scapegoats. Everything can easily be blamed on them. Since you rarely get to speak to anyone at the investors' group it is hard to tell who is telling the truth. In this particular situation Wells Fargo is saying that the investor is not forgiving the past due debt and that makes the payment go up on a loan modification because then Wells Fargo would have to put that past due balance along with all the penalties and fees into the loan modification which then may cause the homeowner to not qualify financially for the loan modification.

Servicers have agreements, contracts that they sign with investors. These agreements contain the rules for modifications. These agreements are called Pooling and Servicing Agreements which is known as PSA's. The PSA is most often what the servicer says is the reason for them not being able to do the loan modification or release the deficiency on a short sale.

But when you talk to other people in the management areas or to the investors they claim that there is nothing in the PSA's that would prevent the servicer from approving loan modifications, short sales and releases. There is a new study coming out from a law school wherein they state that only 8% of these mortgage-backed securities  agreements contain any language that says the servicer is not allowed to do a loan modification for these notes. That means that about 92% of all the NO's; could actually be YES's. So why would that even happen?

Fear of law suits! The language in the PSA in question here, Wells Fargo and Deutsche Bank- it says that Wells Fargo can "waive, modify or vary any term" as long as Wells Fargo as the servicer makes a "reasonable and prudent determination" that the modification is in the investor's best interest. Attorneys examining these agreements say there is quite a bit of room for servicers to make these decisions. But the language itself in this agreement is enough for the servicers legal counsel to be concerned with the investor suing them for not acting in the best interest of the investor. They can not, no matter how inhumane this sounds, put the homeowner ahead of the investor. This is about business and if they want business from investors they need to make sure they are looking out for the interests of the investors.

The treasury department has stated that the fear of law suits is the biggest deterrent to getting the servicers to approve loan modifications and short sales. So doing little or simply turning down the loan modifications are the answer many servicers choose. This is not personal and this is not against you, the homeowner. The position of the servicers is to watch their own backs and to protect the assets to which they have been entrusted with, your mortgage-backed security. The Treasury Department says they can relieve some of the pressure of the fear of lawsuits by standardizing requirements for loan modifications and also provide some type of calculation to figure out if the investor will make more money by the loan modification or by the foreclosure.

We need to keep in mind one big thing in all of this and that is that these investors end up being regular people because most of these mortgage-backed securities were bought by pension funds and retirement plans of folks like your parents or even yourselves. You may well be one of the shareholders of the very loan you can not pay.

 

        

 

 

To  view Florida Short Sales- Click here. We know Palm Beach County Short Sales and Port St Lucie Florida Short Sales and will help you get your home Sold if you need to Sell your home and help you buy your home in Palm Beach County Florida : Call us today.

 

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Is Your Short Sale Or Loan Modification Being Turned Down?-was first published on South- Florida-Luxury-Living.com.

Copyright © 2009 By Katerina Gasset, All Rights Reserved.*Is Your Short Sale Or Loan Modification Being Turned Down?* 

 

 

 

If your mortgage is set to adjust this year, the smart move may be to let it. Today’s conforming mortgages are adjusting lower than ever before — as low as 3 percent. It may not be what you expected when you signed for your ARM several years ago.

The reason why ARMs are adjusting lower is because of how they’re made.

When conforming adjustable-rate mortgages adjust, they adjust according to a pre-determined formula. The formula is the sum of a constant and a variable and it pretty easy. The constant is usually 2.25 percent and the variable is a daily-changing interest rate called LIBOR.

The formula looks like this:

New Mortgage Rate = LIBOR + 2.250 percent

LIBOR is an acronym for London Interbank Offered Rate. It’s an interest rate at which banks borrow money from each other. In Fall 2008, when Lehman Brothers fell and sparked a global banking fear, LIBOR spiked as the risk of inter-bank borrowing jumped.

Since then, however, LIBOR is down.

Normalcy is returning to banking and the timing couldn’t be better for Austin homeowners with ARMs. 15 months ago, a homeowner’s ARM may have adjusted to 6 1/2 percent. Today, that same ARM falls to just above 3.

As a strategy play, it might make sense to let your ARM adjust. Or, because fixed rates are still near 5 percent, converting that ARM to a long-term fixed-rate product might make sense, too. The decision is a balance between how low do you want your payment, and how long might you live in your home.

The longer you stay, the more it might make sense to switch to fixed-rate, even though ARM rates are so low.

If you’ve got an adjusting ARM, feel free to contact me about your choices. Once March ends and the Fed withdraws its mortgage market support, mortgage rates may rise and the fixed-rate option may be gone.

________________

Check Tommy out on Twitter @RightMtgGuy for the latest and greatest mortgage advice

Whenever I go on a listing appointment, I generally find that the seller already has a “number in their head” about what their home should sell for.  This number can come from various sources.  It is – unfortunately – almost always higher than the current market can command.

In truth, I can’t blame sellers for this…their minds have been levered to continued price increases to such an extent that the current market has left most sellers blind sided.

The first thing I often hear is that “I need to get X out in order to buy my next home which I can now get for Y  because its gone down in price.    The trouble if the property you want to buy has gone down so much in price, chances are the property that you want to sell has gone down by a similar percentage.  Wishful thinking is often the culprit here.  Markets are fluid – that was fine when prices were going up – but it also holds true when prices decline.

Misinformation is another issue.  Many sellers look at what their neighbor is asking for their home.  Asking isn’t getting.  Many listings are overpriced  in this market – so setting your price on the basis of other listings is not a wise strategy.

“But my neighbor sold their house for X just six months ago!”  Six months is a lifetime in a depreciating market.   If your market is depreciating – and many markets still are – then prices have decreased over six months.

Zillow zestimates and other information on the internet may or may not be accurate.  Zillow has been off as much as 25% in our area.   So if the zestimate of your property seems too good to be true, it probably is.

If you need to sell, price your home competitively – this is particularly important in a declining market where inventories are high and buyers are few. Overpricing your property will result in fewer or no showings.  The property will sit as the market declines further – resulting in an even lower price down the road.   Overpricing a home is just about the worst thing you could do in this competitive market.

© 2010 Ruthmarie G. Hicks – http://thewestchesterview.com – All rights reserved.

Dear Seller, About that number in your head….

 

 

 

 As a former Social Worker I am reminded of Elizabeth Kubler-Ross book "On Death and Dying' and the five stages a terminally ill patient goes through when informed of their life threatening illness.

The five stages she identifies in her book are:

• Denial ( this isn't happening to me!)
• Anger( why is this happening to me?)
• Bargaining ( I promise I'll be better person if...)
• Depression ( I don't care anymore)
• Acceptance ( I'm ready for whatever comes)

As I reviewed these five stages and relate them to Sellers I have worked with or am currently working with I am drawn to how these same stages are exactly what sellers go through when selling their home in a short sale.

Stage 1 Denial:

Many sellers who are falling behind in their mortgage payment often do not get help or seek help because they are in total denial. They often think nothing is going to happen to them even after the bank has sent them the Notice of Default letter.

Stage 2 Anger:

This is a very difficult stage. Many homeowners remain angry through the Short Sale/Foreclosure process. Reports of homes being trashed and appliances missing are usually the signs of people who have a lot of anger and direct this anger onto the property.

Stage 3 Bargaining:

This is the stage where sellers exhibit a lot of ambivalence. They do not want to loose their home and will do almost anything to keep it. Some sellers will contact their lenders and try to negotiate a loan modification while you are doing a short sale. You have to be aware of your seller in this stage because they are very vulnarble and will sabotage any efforts you have initiated because they have not truly accepted the need to sell their home.

Stage 4: Depression:

Sellers in this stage just stop caring about the house and will withdraw from you as their agent. It is important to maintain contact with your sellers during this stage and give them support and assure them that what they are doing is in their best interest.

Stage 5 Acceptance:

This is when you see your seller come out of their shell and begin to prepare for a life after the Short Sale.