5 Reasons You Still Need a Real-Estate Agent You may think that buying or selling on your own will save you money, but it could end up costing you more money. While you may save the significant cost of commission that real estate agents command, buying or selling your home is a major financial and emotional task. Below are 5 reasons why you should consider using a real estate agent. 1) Better access/convenience: The real estate agent’s job is to act as a liaison between the buyers and sellers. The real estate agent will have access to other properties listed that meet your criteria. If you are selling your home, the real estate agent will solicit the calls from interested buyers. 2) Negotiating is tricky business: You can express your dislikes to the real estate agent regarding the color of the walls and carpet or décor, then let the real estate agent convey your concerns and negotiate a discount without ruffling the seller’s feathers. Let the real estate agent play the “bad guy”. Sellers can reject an offer for any reason, including just because they do not like their decorating talents or lack of. 3) Contracts: The Offer-to Purchase Contract is there to protect you and ensure that you are able to back out of the deal if certain conditions are not met. You could loose your deposit and be even be sued by the seller for failing to fulfill your end of the contract if when buying a home with a mortgage you fail to make financing one of the conditions of the sale and you are not approved for the mortgage. Real estate agents work with contracts and conditions on a regular basis and are familiar with which conditions should be used. 4) Real estate agents are not to lie: Because they are licensed professionals, there are repercussions if they do not tell the truth. If you are working with a licensed agent under an agency agreement, such as a conventional full service commission agreement in which the agent agrees to represent you, the agent will be bound by law to a fiduciary relationship. 5) Not everyone saves money: Many people avoid using a real estate agent in order to save money, but it is unlikely that both the buyer and seller will reap the benefits of not have to pay commissions. While there are those people who are qualified to sell their own homes, websites suggest the process is not as simple as many people assume. When you get into a difficult situation, it can really pay to have a professional on your side.

5 HURDLES FOR HOME FINANCING

You have no doubt noticed how difficult it is to get approved for a new mortgage these days and you are not imagining it. The number of mortgage applications that get approved is probably 3 out of ten, where as in the past boom years it was 9 out of 10 and the normal ratio is 5 or 6 out of 10.  Underwriting standards have tightened, meaning buyers need high credit scores and more income with a higher down payment. There are many obstacles in financing a home but the following 5 are problematic.

1. Higher credit score requirements – To get the best deal you better have top-notch credit scores.

2. Greater scrutiny of income and assets – Previously banks were relaxed on verifying income and deposits, not anymore.  Homebuyers need to be ready to prove anything that may remotely look funny.  Qualified buyers are even put through the wringer and often turned down because of the appraisal issue, property issues or anything that looks strange, even if they buyer can prove they can pay cash for the property. 

3. Ever-changing borrower requirements – It used to be that anyone with decent credit could get a loan for any size home, now it is critical to have a credit score above 700, debt ratios below 36%, a minimum of 20% down, and good stable employment. Even with all this the guidelines could still change.

4. Appraisals are coming in low – Due to the large amount of short sales and bank owned sales, homes are not appraising for the contract price. Part of the problem is appraisers may be inexperienced and unfamiliar with the neighborhood which results in inaccurate appraisals and unnecessarily rejected loan applications.

5.  Condo purchases face additional tests – Condo loans are much tougher these days, because the condo building has to be approved in addition to the buyer. They are documenting cash reserves, owner occupancy ratios, low delinquency rates on monthly assessments and more.

If one can manage through all the hoops and take advantage of the low interest rates and home prices we should see fewer foreclosures in the years ahead.

* This information was taken from an article on msn.com/realestate.

7 FIXES TO BOOST YOUR HOME’S VALUE

There are several simple and affordable fixes you can do to boost your home’s value.

1. Paint – A fresh coat of paint can do wonders, it gives dirty walls a clean look. Dark colors can be stylish, but lighter shades brighten up a room

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2. Flooring – Well maintained flooring can give a positive tone for the entire interior of the home. Lighter tone flooring can make a drab area appear modern.

3. Accents – Change your window coverings and area rugs. Remember lighter colors are best, if the floor is in great shape, skip the area rug it will make the room appear larger.

4. Windows – Old windows can be ugly, but they also let the heat and air escape costing you extra dollars. Window coverings are typically the focus for many the actual windows themselves are often overlooked.

5. Landscaping – Poorly trimmed bushes and overgrown lawns can kill a home’s curb appeal. Clean up the bushes, flower beds and keep the lawns fertilized and trimmed.

6. Decorative touches to the yard – Not pink flamingos or garden gnomes but benches, stepping stones and fountains. These accents are visually appealing and create a welcoming environment.

7. Exterior touches – Accent paint on window frames, decorative beams and porches, calm colors that complement the homes exterior color scheme. Clean brickwork and concrete slabs with masonry cleaner to make them appear new and neat. Power washing is a great quick makeover.

*This information was taken from msn.com:realestate.

STAGE YOUR HOME LIKE A PRO FOR FREE

You can make your home stand out from the rest by staging your home yourself with a little work.  Your home must look its best to stand out against the competition, you need to stage your home to get top dollar.  There are companies that will stage your home, but that can cost a lot of money, with a little work and investment you can do it yourself. Here are some ideas to help you sell your home faster and for more money.

• Pack away any personal items. You must make the buyers feel as though the home was meant for them, pack away your family photos and personal items.
• Start packing.  Now is a good time to start packing and clean out the clutter.
• Curb appeal. The outside is the first impression, touch up paint and bright colored flowers can draw a prospective buyer into the house. Make the entry inviting with a potted plant and chair with colorful pillow.
• Define each room’s purpose.  Restore each room to its original purpose and stage it as such.
• Unify color. Make sure the colors of the home flow from room to room.
• Furniture. When packing away clutter, hopefully you stored excess furniture to make the rooms look bigger.  Furniture does not have to go against a wall, sometimes this can make the room look smaller.  If you have a fireplace, position the furniture so buys can sit and have a conversation and enjoy the fireplace. Less is more when it comes to furniture.

 

When you are done, ask an honest friend or neighbor to tour the home and give their input. Remember to keep the home looking its best while on the market.

*This information was taken from an article in MSN Real Estate

Fast Credit Score Fixes For The Best Mortgage Rates

Your Credit Score Can Cost or Save You Thousands

Getting the best mortgage rates relies on your credit score, and lenders are digging deeper than ever into homebuyer’s credit reports, credit card spending, bill paying consistency and debt-to-income ratios. While there are no quick fixes to erase blemishes, there are things that can be done to start improving your credit score immediately and dramatically.

1) Pull your credit score – Know your exact credit score and determine whether any wrong information has affected it. Approximately one-third of consumers have errors on their credit report.  Make sure the corrections are made before applying for a home loan. This should be done three months before applying for a mortgage.

2) Pay down your debt – You need to show lenders you can manage credit responsibly before you take on a mortgage.

3) Target credit accounts that matter most to lenders – Major credit cards are by far the most important, do not forget about store credit cards. Expect payments for doctor’s fees, utility bills and home equity lines to be looked at as well.

4) Piggy-back on good credit, married couples can start anew when buying a home – Utilize the good credit of a significant other, a relative or a good friend, get added to a credit card as a joint account holder. As payments continue to be made on time, your credit score will increase.  Use secure credit cards, arrange for lender to report your payment history to the credit bureau.

5) Attempt to increase your existing credit limits, don’t open new accounts – Avoid starting new lines of credit.  Your score can actually benefit from increasing your credit limits.

6) Don’t continue to pay bills lat, especially your mortgage payment – Starting to pay your bills on time can start to correct your credit score. Approximately 35% of your credit score is based on whether you pay your bills on time. You just have to meet the minimum by the due date.

** Information for this article was taken from AOL Real Estate

5 Tips For Recession House Hunters

When real estate sales are down and there is an abundance of homes for sale, buyers have an “opportunity” to get a house at a good price. There are times to jump and times to restrain and avoid an impulse buy.  Knowing the difference can save you thousands of dollars.

1. Homework – Buyers normally have advantages in a down market, but do your research. Search the internet for available homes, inquire with a Real Estate Agent and check the newspaper to obtain knowledge on particular areas. Make yourself familiar with the price range for the area you are interested in.

2. Be Organized – You are not the only bargain hunter searching the market.  Get pre-approved for a mortgage.  Have a home inspector and insurance agent lined up.

3. Find a Motivated Seller – Some homeowners need to sell their homes in a hurry, this gives you bargaining power. You can ask the seller to pay all or half the closing costs. How do you identify a motivated seller? The home may have been on the market for several months and has had several price reductions or at the showing the house may be empty, which suggests the seller has moved and may be paying two mortgages.  A real estate agent can look in the MLS and obtain price changes. Many states the deed records and home sale information is available to the public on the internet.

4. Negotiate – The seller is not the only person you can negotiate with, you can also negotiate with the real estate agent.

5. Make Sure There Is A Clear Title – During hard times, sellers may be forced to sell because they are upside down on their loan, the property itself may have a lien from a contractor, service provider, bank or other financial institution.  It is always wise to use a title insurance company and have a title search completed.

This information was taken from an article on msn.com

6 Ways to Write an Offer a Seller Can’t Refuse

Have your heart set on a particular home? There’s more than money involved in making sure your bid wins. In real estate, money isn’t everything. Buyers with the biggest offers don’t always prevail. Here are 6 steps to ‘yes’

1.  Hire a skilled negotiator.
Your secret weapon against such competition is an experienced, well-trained real-estate agent. Buyers who don’t use an agent “are shorting themselves the knowledge and experience,”

2. Get pre-approved for a mortgage.
Before you make an offer, get approved for a loan. This gives you almost as much power as a buyer with cash. “If they know you have a loan commitment in place, they’ll treat you as a very serious buyer, even if your initial bid comes in below what they were expecting.

3. Learn all you can about the seller.
“If we want make an offer that a seller is going to be attracted to, we have to understand what is important to the sellers.

 4. Make concessions up front.
Armed with whatever you’ve learned about the sellers. Decide how to neutralize each objection and make life easier for the seller. Make a “clean offer,“ Buyers frequently ask sellers for help paying their closing costs. Make a “clean” offer with no request for help. Include an automatic escalation clause, In a competitive market, offer to automatically increase your offer by a specified amount – say, $500 — over the highest bid. You can put a limit on how high you’ll go or not. Be sure your offer requires the seller to show you any other offers in writing.

• Time: When sellers want to move quickly, jump, if you can. Sellers often are grateful to save a mortgage payment, storage costs or rent on interim storage or accommodations. Or, if sellers need to wait until a new home is free, or because they need time to pack, let children finish school or say goodbye to friends, offer to delay your move-in date. You can always charge rent. You can also use this tactic in reverse to get your own needs met:
• Earnest money: The (refundable) deposit for $2,000 or $3,000 that you attach to a bid to bind the offer is called “earnest money.” “The bigger the deposit, the more serious you are.” To make a good impression, offer more, up to 10% of the purchase price. To further sweeten the deal, make part or all of the deposit non-refundable after the home has passed inspection, to demonstrate that you want to stay in the deal.
• Accelerate the deal: A purchase offer is typically contingent on certain milestones that are set by state law: The buyer has a certain number of days to get financing and an appraisal, the seller has a time frame to have an inspection done. Where the law allows it, you can shorten or eliminate deadlines to raise your offer’s appeal.
• Waive the appraisal: Appraisals have become a source of anxiety for sellers, and deals often fall apart because the appraiser finds the home is not worth the purchase price that the buyer and seller have agreed on. Banks will only loan you a percentage of the home’s appraised value. But, if you’re able, you can include in your offer the promise to pay any difference in cash — up to, say, $5,000 over the appraised value.
• Waive the inspection: Here’s how this enticement works: Some sellers will take a lower price if you offer to buy the house “as is.” You, however, reserve the right to back out of the deal if you don’t like what the inspection turns up. Some sellers love this because it allows them to close quickly, free of the cost and burden of correcting unforeseen problems.
• Wave money: Never underestimate the sweetening effect of money. Offering the full list price or more is the traditional way of getting a seller’s attention.
• Wave cash: If you’ve got the wherewithal, offer to pay in cash. For a seller, cash signals your financial solidity and promises a quick closing and no waiting for you to get financing.

5. Write a love letter to the sellers.
When you really want a place, you’ll go to some special lengths. “Sellers care deeply,” when you explain with sincerity what owning their home would mean to you, who you are and how you envision your life there.

 6. Get your offer presented in person.
Finally, the expert sales trainers say your offer has a far better chance when your agent presents it to the sellers in person. Not all agents will do this. And not all sellers’ agents will let them. But, as a buyer, you can sure try. Start by asking, when you’re interviewing agents, “Are you going to present my offer in person to the seller?”

This article was taken from MLS.com Real Estate.

Mortgage Rates Hit New Low

Conventional fixed mortgage rates hit a new low.  A 30-year fixed mortgage rate available to well-qualified consumers at 1 point origination dropped to 4.375%. A 15-year fixed-rate dropped to 3.875%. The decline in mortgage rates are due to a big increase in mortgage-backed securities prices. FHA mortgage rates continue to mirror those of conventional mortgages. Jumbo mortgage rates are down as well. A 30-year fixed jumbo loan rate for true jumbo loans exceeding conforming “high balance” county loan limits is 5.375%. These rates are available to well-qualified consumers paying a standard .07 to 1 point origination. Wells Fargo, the number one originator of residential mortgages in the US, is advertising a 30-year fixed-rate of 4.875% with an APR of 5.065% (source: Wells Fargo website). Today’s Mortgage Rates - available to well-qualified consumers paying a standard .07 to 1 point origination. 30-yr fixed-rate – 4.375% 15-yr fixed-rate – 4.000% /1 ARM rate – 3.500% FHA 30-yr fixed-rate – 4.375% FHA 15-yr fixed-rate – 3.875% FHA 5/1 ARM rate – 3.500% VA 30-yr fixed-rate – 4.625% Jumbo 30-yr fixed-rate – 5.375% Jumbo Conforming 30-yr fixed-rate – 4.625% This article was taken from RealtyTimes dated 6/8/10.

Obama’s Foreclosure Program

More foreclosures are coming! That’s the warning we’ve been getting for months from economists.

The problem is big government. Federal foreclosure programs have slowed the foreclosure process, but creating a huge pileup of homes on the road to foreclosure.

Loan modifications have simply delayed the inevitable. For hundreds of thousands of borrowers who faced foreclosure, the delays are over.
In April, banks canceled more than 100,000 temporary modifications to home loans made through the Home Affordable Modification Program (HAMP), the biggest federal foreclosure prevention initiative. That makes a total of 278,000 borrowers who once had temporary modifications to their home loans but who have since left or been thrown out of the program. Many of these borrowers are likely to lose their homes, if they haven’t already.

At the same time, hundreds of thousands borrowers found happy endings to their mortgage problems through the Obama Administration program. More than 295,000 borrowers received permanent modifications to their loans through HAMP by the end of April. They now are making new reduced mortgage payments, which will last at least five years. That’s 295,000 people who were on the brink of foreclosure who now have a much better chance of keeping their homes.

So the HAMP program is batting about .500. More than a half-million people have now gone through the HAMP trial modification process, split about evenly between people who received permanent loan modifications and those who were thrown out of the program.

After more than a year of delays, the program is moving.

As 2009 came to an end, the program seemed incapable of helping anyone. Close to a million borrowers had received temporary HAMP modifications of their mortgages through the program, but only a few thousand had those modifications become permanent, but many remain in limbo. Many banks seem determined to drive homeowners out of the HAMP program and into foreclosure.

Taken from AOL:Real Estate, May 21, 2010

Federal Mortgage Program-Stall in Applications

The effort by the Obama administration to keep homeowners out of foreclosure is reaching its limits way before the crisis abates.

The government’s loan modification program has helped about 300,000 defaulting households get new loans according to data released.. But that is only a small fraction of the estimated four million households in danger of foreclosure and of the 1.7 million households that the government thinks would qualify for the program.

There are several possibilites for the scarcity of applicants. Some may feel it is more financially advantageous to default, pay nothing for numerous months and then walk away from the house. Some may have committed fraud when getting their loans and are reluctant to come forward. And some may not be aware of the program.

More than 637,000 households are in the trial phase of the program, during which borrowers need to continually make their payments. Many do not achieve a successful modification, and secure a new loan. The number of failed trials, is nearly as great as the number of successful ones.

“The program is dying,” Calculated Risk, a popular financial blog, stated.

David Stevens, assistant secretary for housing in the Department of Housing and Urban Development, said the program was “in transition.”

The administration now requires loan servicers to verify the income of households at the beginning of the trial rather than at the end. This is expected to allow more households to achieve full modifications by ensuring they have the income to keep up with payments on the new loans.

In the meantime, Mr. Stevens said, “We expect the number of those in trial modifications to increase again.”

The modification program has been criticized for a slow start, which administration officials acknowledge is true. 

“There are millions of people in trouble on their mortgages, and for whatever reason, we’re not moving fast enough to help them,” Julia Gordon, senior policy counsel for the Center for Responsible Lending said.

For borrowers who get modifications, the payments may be reduced by about $500 a month, but that might not keep them out of trouble.

Modifications reduce the interest payment and often extend the term of the loan as well. Sometimes payment on a chunk of the principal is postponed.

New government programs to deal with the crisis include encouraging lenders to forgive some of the principal owed. Another program facilitates short sales, in which the borrower owes more than the house is worth.

“We were dealt the worst foreclosure crisis we had seen since the Great Depression,” Mr. Stevens said. “The modification program was created without any framework or reference point, but it has had significant impact.”

(Reprinted from New York Times, mary 17, 2010)