RealEstateConsumerInfo.com: September 2010

Can you imagine owning a home for only $1100 down in the Elgin and Carpentersville areas?

• Income must be between $23,000 to $45,000 per year *
• Mortgage payment would be $550 to $750 with 0% interest (not a typo - it's zero)
• Willingness to help with construction of your home

Can you imagine owning a home for only $1100 down in the Elgin and Carpentersville areas?

• Income must be between $23,000 to $45,000 per year *
• Mortgage payment would be $550 to $750 with 0% interest (not a typo - it's zero)
• Willingness to help with construction of your home

Looking for a mortgage?  Confused, perplexed, and be-twixt?

Trying for the 'lowest rate' isn't always the best idea.  Getting the best deal for you takes many things into consideration.  'Collectively' what is best for you?

This post by Jeff Belonger, gives a great explanation on how to shop for that rate and feel good about the results.

Interesting question brought up on my 'Smallest House' post about financing problems on this 'peanut' of a house (I mean cozy of course).  Perrin Cornell brought up a point about lenders having a minimum square footage amount for a property.  I had never heard of this but it's better to be proactive right?

I started with email questions to all the lenders that I normally use.  My fingers were setting fire to my computer keys!

"The square footage on this house is only 580 are we going to have a problem?  Is there such a thing as too small of a house to lend on?"

I can't say that I was amazed at the speed my LO's got back to me (another post).  The one friend that can no longer originate in IL (company preference now) got back to me the fastest & he can't even do the loan!  The other 'in house' lender moseyed along in 2nd place with another question to my question.  The 3rd lender is still MIA on an email answer after 4 days!  Hmmmm.

As far as the loan requirements in my area of IL, there is no minimum square footage that Perrin mentioned BUT obviously there is the minimum loan amount for my area which in most cases is $50K to $75K or higher.  The one loan officer brought up a good point asking "are there any other houses for comps as this one cannot be the 'exception' for the neighborhood".  

Great! Another appraisal requirement that I had never heard about before.  Literally, no exceptions!

Any other weird loan requirements for your area?  

Capture My Chicago

Recently Channel 2 in the Chicago area opened a pictorial website for photos taken just in the Chicago area.  Every year they select the best of those submitted and publish a coffee table type book of all the great photos.  You don't have to be a fan of Chicago to see that there is just a fabulous amount of talent here to choose from!

So jump in and experience the Chicago area in a whole new way. There are a few categories (architecture, cityscapes, flowers), some popular photos and recent submissions to get you started.

I personally submitted a few pictures that are getting voted on everyday!  The photo here is of the ferris wheel on Navy Pier taken by me when eating lunch one afternoon.  Aww shucks Ma, I'm famous!

Take a short visit to Chicago if you can!

Winner of the 'What were You Thinking' Award

I get Google Alerts for the different areas that I market in just to keep on top of things.  All things, good and bad.  This one made me laugh & then I thought, gosh, how pathetic is this.  Clicked on the link and it took me to a $700,000 house!  If I was the seller of that home I would be furious.  Cheap Homes For Sale - what a marketing genius this person is!  Better yet ..... why not make the minimum listing price at $500,000 just to be more ridiculous!

I think that trying to get the edge, this agent drove off the cliff with this website name.  A few possible others maybe?

Wrecks R Us
Gutters to Go
Better Homes & Gutters
Basements That Flood .com
Shacks in Shambles
Burn Me for the Insurance .com

Any other suggestions?

Sad but true story about disputing incorrect items on your credit report BEFORE you begin looking for a home.  This is just another reason to 1) procure the needed mortgage money and 2) then look for a home.  Not the other way around!

Some 'small' issues have a way of growing into Credit Report Godzillas that would take forever to solve.

Post is by Deb Brooks in Texas.

Possible relief for homeowners or more smoke & mirrors?

I learned about a new bill today HR 6133 regarding Short Sales that requires the lender or servicer of a home mortgage, upon a request by the homeowner for a short sale, to make a prompt decision whether to allow the sale.  PROMPT BEING 45 DAYS.

Supposedly NAR is behind this measure also but why haven't we heard more about it?  This has happened on September 17th and I HAD to go searching for it.  Why does this feel like a back room deal in Chicago?

I support any effort to crash through the log jam of short sale paperwork and make the lenders accountable for their actions.  There has been more than enough time for the banks to gear up and get this program running in an efficient manner.  I think that this is the first step to force an answer from the banks or servicers in a reasonable time frame.
  
Then once the homeowners are rejected will there be a reason?  Or, will it just be a timely rejection?  It's not helping the homeowner as they stand by their mailbox with a rejection letter!  How will that make that next mortgage payment?

I believe the homeowners will justifiably begin to have further relief if it is proven the banks just haphazardly dismissed the request.  Follow the paper trail that you will need for court.

I think we should all follow up with this and show our support.  It's flying low under the radar and I just don't know why.

TBWS Video

Foreclosure Freak Show?

There has been a much publicized Schaumburg foreclosure in our area from a gentlemen who has lived in his home for many years and is definitely down & out.  He's been on every local TV station, front page of the local papers and become quite the 'foreclosure celebrity'.  

Obviously being in real estate, I know what is happening to him between foreclosure proceedings and the village trying to get him to clean up his property.  I live in a very aggressive village where 'no nonsense' is legally dished out all the time.  No compliance, see ya' in court.  Most homeowners can't fight the big guns the village brings to the court room.  This is the same case.  

The village has been trying for years to get him to clean up his property but the owner contends that he needs all the collected materials to 'recycle' and get money.  If you can remember the Redd Foxx Show and Fred Sanford, there you have it.

The homeowner was then locked out of the home by the lender for nonpayment of his mortgage of which he is 2 years behind.  He then began to live in his car, with his dog, on his driveway.  The neighbors are freaking out because he just seems to get dressed and undressed behind the car in the driveway at all hours of the day. On top of all this odd behavior, he cannot afford his bi-polar medication that he needs.  

My neighbors and friends at the dog park always ask me questions about 'how this can be happening' and the different legal options or procedures available both to the owner and to the village.  Then I overheard some of their comments when they were discussing it, they were driving by the house to check it out!  Check out what?  Checking to see an obviously mentally diminished man living in his car with his dog?

While you are driving by and looking, did you happen to bring him $5 for his medication?  Did you happen to bring by any food for his dog that's living in the front seat of his car?

You're just curious and looking at the Foreclosure Freak Show?  I'm not sure what you are curious about?  I am so confused by this behavior from people that I can't even describe it here.  

Why not try to help?  If you can't help, don't drive by if you won't.

Chrissy Doremus did a great post the other day about the smallest house.  It's about 89 square feet which is about the size of most people's one car garage.  

Well, yesterday I was out with a new buyer and I showed this house built in 1900 and it was close to being the smallest house I'd ever been in.  In fact, it was only 580 square feet. The one car garage (280 sq feet) rivaled the interior of this 2BR matchbox, I mean 'bungalow'.  'Bring your decorating ideas aplenty', which means exactly what you are thinking in Realtor© speak.  Yikes!

This house was so small I couldn't lift my arms to take a picture as my elbows got in the way in the 'spacious' eat-in kitchen.  I had to leave my oversized purse in the car for added mobility.

The one featured in Chrissy's post was at least cute & didn't want to make you cry.  It could be worse, I could be the listing agent!

That's a great reason to smile!

Freddie Mac HomeSteps Program Update

Buyers please take notice of these great incentives at Freddie Mac is giving buyers of it's foreclosures on sales closing by the end of the year!

If you are interested in receiving more information about Freddie Mac foreclosures in our area, please give me a call.  You must use a real estate agent to see any of these properties.

Fall Sales Promotion HomeBuyer Incentives**:

• 2-Year HomeProtect Limited Home Warranty***
• Up to 4.0% actual buyer's closing costs!

This is for September 13, 2010 to November 14, 2010 and closing before December 31st, 2010 Owner Occupants only.

Very lengthy article about banks continuing with the foreclosure process even though a Short Sale or Loan Modification is taking place.  It is a confusing subject to many home owners.

Well worth the effort to read this from an attorney in Florida, Richard Zaretsky.

What da ya mean I need a permit?

This is a village list on what type of home repairs or modifications need a building permit.  

Let's talk about the most abused installations in this list:

If you are planning to install a new water heater you MUST have a village permit.  Why?  So that the venting & plumbing are installed correctly so that you don't kill yourself in your sleep from carbon monoxide.  This has to be the Number 1 Problem that we find in home inspections - venting that is not at the proper angle or it's vented totally incorrectly with back drafting.  If you've said to yourself - 'It's ok if I just move the vent piping this way a little bit because it looks better' - you are part of the problem!  Get a permit!

Issue #2 - Your AC or furnace blows up and the HVAC person handles the new install.  You really should have gotten a permit despite what the technician said.  They just don't want to take the time to do it for you or they are not licensed with the village you are living in.

Issue #3 - Miscellaneous plumbing issues that you 'think' you are handy with.  Such as installing a new toilet without a wax ring and saying 'I don't need that damn thing, it's only 2 bucks. The old one looks good'.  So now, you've got a problem!  You need a permit because, yes, you do need a new wax ring when you remove the toilet.  Now before you say, they'll never catch me, the building code inspectors just might be driving by your home on garbage day and notice an old toilet sitting by the curb.  Hmmm, I'm sure the toilet didn't take a leisurely walk outside so you'll get busted that way.  I've seen it happen to my neighbor.

Issue #3A - You've installed a new dishwasher and decided to plumb with PVC another unknown right turn for?  For what?  You are not making a jungle gym for your kids hamster!  You want to be sure that your kitchen and dishwasher drain correctly so your whole family stays healthy!  

Issue #4 - You've decided to install all new GFI outlets in the kitchen or bathroom - only you've wired them incorrectly and they don't work!  Yikes!  This is just wrong!  Hire someone that knows what they are doing.  Life can get just 'too exciting' when you do your own electrical work.

Hello, is anybody there?   (long echo ............ crickets)

That's what the market has been like here in the Northwest Suburbs for the last 2 months.  It's been very lonely and I'm sure most sellers will agree with me.  No action!  

What I've noticed is lots of internet 'shopping and lurking' but no real foot traffic into the homes themselves.  Inventory is UP over last year and in a few instances 2009's sales total have surpassed 2010.  So if we stop for a moment and wonder where the buyers actually are?  (crickets again)  I can't actually say.  But they are lurking.

Interest rates are the absolute lowest they have been in 40 years.  Rates (in sidebar on right) are just about as low or lower as when my parents bought their first home VA back in 1956!  They were horrified and scared at that 4.5% interest rate but then came the 8%, the 10%, the 12% and above.  You know the rest of the story there - it was a good move at the 4.5%.

Traditionally July and August have always been vacation months and the slower selling months.  I was anticipating more activity based on the rates, the great prices, etc.

Are buyers waiting for the official word on another tax credit?  Possibly.

Should buyers be aware that waiting to purchase a home after October 4th, 2010 with an FHA loan will cost them more?  I bet they don't realize it, but I've tried to get the word out to them to start planning now!

Hello, is anybody there?   (long echo ............ crickets)

That's what the market has been like here in the Northwest Suburbs for the last 2 months.  It's been very lonely and I'm sure most sellers will agree with me.  No action!  

What I've noticed is lots of internet 'shopping and lurking' but no real foot traffic into the homes themselves.  Inventory is UP over last year and in a few instances 2009's sales total have surpassed 2010.  So if we stop for a moment and wonder where the buyers actually are?  (crickets again)  I can't actually say.  But they are lurking.

Interest rates are the absolute lowest they have been in 40 years.  Rates (in sidebar on right) are just about as low or lower as when my parents bought their first home VA back in 1953!  They were horrified and scared at that 4.5% interest rate but then came the 8%, the 10%, the 12% and above.  You know the rest of the story there - it was a good move at the 4.5%.

Traditionally July and August have always been vacation months and the slower selling months.  I was anticipating more activity based on the rates, the great prices, etc.

Are buyers waiting for the official word on another tax credit?  Possibly.

Should buyers be aware that waiting to purchase a home after October 4th, 2010 with an FHA loan will cost them more?  I bet they don't realize it, but I've tried to get the word out to them to start planning now!

Septemberfest Parade 2010 - Wells Fargo and RE/MAX Suburban have a great time!

Was happy to participate in the Septemberfest Parade this year with the Wells Fargo Stage Coach & horse team.  We had so much fun it was like being a kid again! Yeeeeehawwww!

BTW the stagecoach driver was afraid I was going to yell that too loud & the horses would start to run down the street!  Anyway, the weather was great and tons of Schaumburg residents & visitors lined the parade route!  We had a couple members of our RE/MAX Suburban 'Zipper Club' (guys that have had open heart surgery) that even walked the parade and made it!  

I was disappointed because we were so generous that we ran out of candy the first block of the parade.  I always remember this as a favorite part of the parades when I was a kid so I has giving it out left and right in handfuls!  

So next year, cases of candy on top of the stage coach!

Why shall I pay top dollar and rent Grandma's House?

Sellers that cannot sell their Schaumburg Home in our market area are turning to becoming landlords.  They really don't have a clue what is expected or what they should do to prepare for this new moniker but most are financially pushed into the situation.  I'll call you the reluctant landlord!

Here is some advice ~

1)  If you haven't painted your homes interior since 1990 (exterior too!) why would you think that a renter would want to live in your property?  Most expect a nice neutral paint job without your youngest child's crayon marks.

2)  Carpeting - if you still have carpeting that looks anywhere on the color spectrum near 'baby blue' or 'mauve' - you're in trouble.  If you don't like the carpeting any longer, why should your new tenant?

3)  Maintenance - Be assured that the tenant will do the minimum lawn & exterior maintenance to your home. They'll mow the lawn MAYBE once a week.  I am assuming that you will have to stay on top of them before the village does it for you with a fine.  Because of the increased foreclosures in the area, most villages are having a zero tolerance on lawns that are not being cut.

4)  Updating your home - When (or if) was the last time that was completed?  Recently working with a transferee from Colorado we went into a home with the original 'formica' counter tops.  I haven't seen these since I was a kid!  The couple wanted nothing to do with the old dilapidated kitchen cabinets, gold toned flooring and brick paneling.  If you are asking market rent your home better show in top market condition.

If your home is not updated and neutral you cannot expect to get current market rent!  Sorry, the home that looks the nicest and gives the best features also sells the quickest and rents the fastest.  Your new tenant does not care how long the house has been on the market nor your current financial condition.  They want the best house for the least amount of rent.

5)  How does your property smell?  Does the house smell like it hasn't been cleaned since 1990?  A musty smell to a prospective tenant is a warning sign of potential mold and lack of maintenance on your part.  

6)  Who will do the maintenance on your rental?  If you are not the 'handyman type' then you had better have someone on call for items that occur at all times of the day or night.  From past experience, water heaters never seem to break in the middle of the day!  It's always when it's the most inconvenient near the 'witching hours' of 2 to 3:00am.  Do not expect the tenant to treat the home in an emergency the same as you would.  Prepare for anything that can happen.

7)  The tenant wants the least amount of hassle from the landlord just as the landlord wants the least amount of hassles from a tenant.  Asking for odd and unreasonable conditions of a tenant will only have you sitting with the house longer than necessary.  What conditions you're wondering?  Security deposits for garage door openers of $100.  Get a grip here!  

What would be important to a landlord is credit score and past pay history of rent or mortgages.  My advice would be to hold to a minimum as best you can there.  Check and verify everything that is on the credit report to give yourself a good financial picture of the prospect.  If the applicant has a good credit score and a good pay history maybe allowing a dog won't be such a bad thing after all?  Obviously dog and cat owners can pay rent on time too!  Any fears can be relieved with a pet deposit given along with the security deposit.  Make it obvious in a rider that any damage by the pet will be paid for by the tenant!

FHA Gives Home Buyers an Extension!

FHA is giving homeowners and buyers until October 4, 2010 to lock in a low monthly insurance premium.  Afterwards the monthly insurance premiums on FHA loans will increase by over 63%.

What does this mean for you the home buyer?

A home buyer purchasing a $200,000 home using a $193,000 FHA mortgage before October 4 would pay an insurance premium of $88.46 per month.  After this deadline the insurance premium would jump to $148.01 per month.

In this example, the home buyer would pay $59.55 per month MORE.  Although the upfront mortgage insurance premium is going down after the October 4th deadline, the real impact to the home buyer is actually a net increase in their out of pocket costs because the monthly premium is going up by 63%.

Remember, sellers can pay the upfront premium or it can be financed into the loan amount, so buyers rarely choose to pay the upfront premium out of pocket. On the other hand, the increase in the monthly premiums will be paid right out of the buyer’s pocket with their mortgage payment each month.

So Lyn in plain english please, how will this effect me?  This change will reduce your ability to borrow by about $10,000 on a $200,000 purchase.

Ironically, home buyers who plan to be in the mortgage for less than three years and decide to pay the upfront fee themselves (instead of having the seller pay it for them), may actually save money by waiting until after October 4th to apply for an FHA loan.

Home buyers with a short term time buying strategy may actually benefit from this change because the upfront premium will be reduced to 1% from 2.25%.  This change is anticpated to impact over 30% of the home buyers in today’s market who use FHA insured financing.