How Would a Realtor Help Me?

March 3rd, 2010

question How Would a Realtor Help Me? Ask a REALTOR®I’m looking to buy my first house. How would a REALTOR® help me versus shopping on my own?

answer How Would a Realtor Help Me? Ask a REALTOR® A good, knowledgeable Realtor could be an enormous asset during your home search. Unfortunately, some buyers still think that Realtors simply provide home listings, drive customers around, and then handle the paperwork. However, a buyer agent does so much more.

A good buyer agent will give you advice on cities/towns, particular neighborhoods, and council you on many other things to consider while conducting your home search, such as the benefits of a condominium vs. a single family, the actual cost of buying/owning multi-families, and ideas on increasing equity in your home and resale factors.

A buyer agent will also be able to make good referrals to additional real estate-related professionals, such as insurance agents, home inspectors, mortgage professionals and settlement agents. One thing I learned early in my career in buyer agency is that at the end of the day, I’m only as good as my worst referral, so we Realtors take these recommendations extremely seriously.

Once you are interested in a property, your buyer agent will do a market analysis, often referred to as a Comparable Market Analysis (or CMA), and will discuss with you his/her professional opinion as to market value, based on similar sold properties, the current local real estate market trends, inventory, and other factors. Lastly, the most crucial service a buyer agent can provide is as a skilled negotiator. In my opinion, this is what separates the best buyer agents from the pack and what will ultimately bring you the most value. A Realtor highly skilled at negotiating could assist you in purchasing the home that best meets your wants and needs for up to a few percentage points off the list price. This could end up saving you thousands of dollars.

Obviously you should choose a Realtor that also matches well with you. It’s always a good idea to talk with or interview a few Realtors to get a sense of who would be the best fit. Also Rick, please remember that not all agents are Realtors, so make sure the buyer agent you call is also a Realtor, meaning that they’re a member of the National Association of Realtors.

Article by David Kres.  He is a REALTOR® for Buyers Brokers Only LLC in NE Massachusetts/Southern NH.

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Should you feel guilty if you walk away?

March 2nd, 2010

These days, with so many of the nation’s homeowners underwater on their loans, that last resort is a more routine economic decision for even the most gainfully employed. This trend is sparking outrage, neighborhood upheaval and calls for government lending reform. 

The use of the term “underwater” on mortgages tends to put fear into peoples minds and helps to create some of the problems we are facing now. “Underwater” means that the value of their home is less than the mortgage amount they owe. If a mortgage is 200,000 and the value of a home is 199,999 then you are “underwater”. It does not mean that they are necessarily in any trouble. Clearly, if someone has lost a job and cannot pay the mortgage then the lower value hurts them in terms of selling or refinancing. In most cases, these mortgages are not effecting people and have are not created problems. Unless you are trying to sell your home or refinance it, the true value is your enjoyment and the pleasure that you and your family have living there. The dollar value is irrelevant. Many people are taking advantage of these times to “walk away” and blame their reasons on the economy. Nothing has changed in their financial situation, they still have their jobs and they have their normal mortgage payment. Home values have already started to increase in many areas and this “underwater” issue will return to “above water” housing. Yes, there are many with problems but there are many more people abusing the system. Smart financial decision?…they should be put in jail.  (MORE)

 

 

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The Basics: Extended Home Buyer Tax Credit 2009/2010

March 2nd, 2010

Bringing the Dream of Homeownership Within Reach

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

  • Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
  • Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream. If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.  (MORE)

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Buffett Says U.S. Housing Will Recover by Next Year

March 1st, 2010

March 1 (Bloomberg) — Billionaire Warren Buffett said the U.S. residential real estate slump will end by about 2011, predicting that’s how long it will take demand for homes to catch up with the supply.

“Within a year or so, residential housing problems should largely be behind us,” Buffett wrote Feb. 27 in his annual letter to shareholders of his Berkshire Hathaway Inc. “Prices will remain far below ‘bubble’ levels, of course, but for every seller or lender hurt by this there will be a buyer who benefits.”

The worst housing decline since the Great Depression has left one in five U.S. mortgage holders owing more than their houses are worth. Record foreclosures last year flooded a real estate market already glutted with unsold property, causing new construction to fall to the lowest in at least 50 years. The fall in homebuilding is the only fix unless the U.S. decides to “blow up a lot of houses,” Buffett joked.  (MORE)

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Anatomy of a Government-Abetted Fraud: Why Indymac/OneWest Always Forecloses

February 16th, 2010

Several times per week, I get phone calls from attorneys. These calls all start out the same. “I am unable to get loan modifications done through a lender. What can I do?” The first question I ask is if the lender is Indymac/One West. Invariably, it is.

I also field the same type of calls from homeowners and from loan modification companies. Everyone is having the problem of Indymac not cooperating with regard to doing loan modifications. Furthermore, if I google the issue or check out loan modification forums, the same is true on the internet.

What is going on with Indymac/One West? Why aren’t they doing loan modifications? This article will try and bring together the known facts for a better understanding of the situation, and discuss what the Indymac situation means for foreclosures in general — and the government’s response to the crisis. First, to understand the situation today, one must have an understanding of the recent history of Indymac.

History

Indymac was a national bank in the U.S. It was insured by the FDIC. On July 11, 2008, Indymac failed and was taken over by the FDIC.

Indymac offered mortgage loans to homeowners. A large number of these loans were Option ARM mortgages using stated income programs. The loans were offered by Indymac retail, and also through Mortgage Bankers would fund the loans and then Indymac would buy them and reimburse the Mortgage Banker. Mortgage Brokers were also invited to the party to sell these loans.

During the height of the Housing Boom, Indymac gave these loans out like a homeowner gives out candy at Halloween. The loans were sold to homeowners by brokers who desired the large rebates that Indymac offered for the loans. The rebates were usually about three points. What is not commonly known is that when the Option ARM was sold to Wall Street, the lender would realize from four to six points, and the three point rebate to the broker was paid from these proceeds. So the lender “pocketed” three points themselves for each loan.

When the loans were sold to Wall Street, they were securitized through a Pooling and Servicing Agreement. This Agreement covered what could happen with the loans, and detailed how all parts of the loan process occurred.

Even though Indymac sold off most loans, they still held a large number of Option ARMs and other loans in their portfolio. As the Housing Crisis developed and deepened, the number of these loans going into default or being foreclosed upon increased dramatically. This reduced cash and reserves available to Indymac for operations.

In July, 2008, the FDIC came in and took over Indymac. The FDIC looked for someone to buy Indymac and after negotiations, sold Indymac to One West Bank.

OneWest Bank and its Sweetheart Deal

OneWest Bank was created on Mar 19, 2009 from the assets of Indymac Bank. It was created solely for the purpose of absorbing Indymac Bank. The principle owners of OneWest Bank include Michael Dell and George Soros. (George was a major supporter of Barack Obama and is also notorious for knocking the UK out of the Euro Exchange Rate Mechanism in 1992 by shorting the Pound).  (MORE)

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IndyMac, OneWest Bank, Taxpayers and the FDIC. Looking Into the Deal Between OneWest and The FDIC and Applying Math To The Resulting Shared Loss Agreement.

February 16th, 2010

First I’d like to say that I’m at the beginning of my research into this whole world of shared-loss agreements.  I am not an attorney.  I am a short sale specialist trying to be the best short sale specialist that I can be. But I have so many questions these days about what is going on behind the scenes.  Many things have stopped making sense in the world of short sales and foreclosures over the past few months. 

I have spent quite a bit of time looking on the FDIC website and pulling documents regarding this issue.  I’ve also read a lot of commentary and articles for or against shared-loss agreements.  The shared loss agreement that is the subject of this post is, by no means, an isolated agreement.  The shared-loss agreements also seem to have a pretty sizable group of fans.  But should they?

Recently I’ve been reading posts by other agents involved in short sales with Indymac where approvals were withheld that should have been no-brainers.  While I have had great luck with my Indymac / One West Bank short sales…it seems that increasingly others are not.  

I talked to one agent who had a sales contract at fair market value in to OneWest bank twelve days before the foreclosure sale.  OneWest told her they couldn’t act on anything they received less than 15 days before the foreclosure sale. That property went to foreclosure sale this week.   In the past I’ve had IndyMac/OneWest foreclosure sales delayed a day or two before the scheduled sale date.   (MORE)

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Big Banks Accused of Short Sale Fraud

January 29th, 2010

Short Sales……Very Interesting!

 Diane Olick is CNBC’s Real Estate Reporter.  She writes her blog titled “Realty Check.”  Her article below was published last Friday, January 15.  It was so compelling that I wanted to share it with my readers who may have missed it.

 Just as regulators, lawmakers and all forms of financial oversight boards are talking about new regulations to guard against mortgage fraud and another mortgage meltdown, there appears to be yet a new mortgage fraud out there today, allegedly perpetuated by agents of, yes, the big banks.

 I was first alerted to this by Jeremy Brandt, the CEO of several companies that bring short sale agents, investors and sellers together.

 His companies include 1800CashOffer, HomeFlux.com and FastHomeOffer.com. Brandt has a huge network of short sale real estate agents, and over the past several months he’s been receiving all kinds of questions and complaints about trouble with second lien holders.

 As we all know, during the housing boom, millions of Americans pulled cash out of their homes in the form of home equity loans and lines of credit. They also used “piggy back” loans in order to get even lower interest rates on their primary mortgages. Now, many of the borrowers in trouble, and many who are so far underwater on their loans that they don’t qualify for any refi or modification, are choosing short sales as a way out. (Short sales are when the lender allows the home to be sold for less than the value of the loan).

About 12 percent of all home sales by the end of 2009 were short sales, according to the National Association of Realtors.

 In order for a short sale with two loans to happen, the second lien holder has to drop the lien.

 If they don’t, and there’s no short sale, the home goes to foreclosure and the first lien holder gets the house because second liens are subordinated debt to the primary loan.

In short, the second lien holder gets nothing. In order to get the second lien holder to drop the lien, the first lien holder generally negotiates some partial payment to the second lien holder. The second lien holder doesn’t have to agree, but more and more are doing so.

 That’s all legal.

 But here’s what’s not legal and what’s apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say “on the side,” I mean in cash, off the HUD settlement statements, so the first lien holder doesn’t see it.   (MORE)

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Facebook Pages vs Facebook Groups: What’s the Difference?

January 25th, 2010

 

“Should I create a group or launch a Page?” It’s the eternal question that gets asked as often as, “What is Twitter(Twitter)?” at introductory social media training classes. Ever since Facebook(Facebook) launched their Pages product as part of their larger advertising strategy (along with the ill-fated Beacon) in November 2007, there has been confusion over which to use. Because Groups and Pages have an overlapping feature set, even senior social media marketing consultants are sometimes stumped as to what to tell their clients. And Facebook continues to make changes to how Pages function, complicating the matter even further.

What is a Page on Facebook?

In their own words, “Facebook created Pages when we noticed that people were trying to connect with brands and famous artists in ways that didn’t quite work on Facebook…Not only can you connect with your favorite artists and businesses, but now you also can show your friends what you care about and recommend by adding Pages to your personal profile.”  (MORE)

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Twenty One Things Your Burglar Won’t Tell You

January 25th, 2010

 

  1. Of course I look familiar.  I was here just last week cleaning your carpets, painting your shutters, or delivering your new refrigerator.

 

  1. Hey, thanks for letting me use the bathroom when I was working in your yard last week.  While I was in there, I unlatched the back window to make my return a little easier.

 

  1. Love those flowers.  That tells me you have taste…and taste means there are nice things inside.  Those yard toys your kids leave out always make me wonder what type of gaming system they have.

 

  1. Yes, I really do look for newspapers piled up on the driveway.  And I might leave a pizza flyer in your front door to see how long it takes you to remove it.

 

  1. If it snows while you’re out of town, get a neighbor to create car and foot tracks into the house.  Virgin drifts in the driveway are a dead giveaway.

 

  1. If decorative glass is part of your front entrance, don’t let your alarm company install the control pad where I can see if it’s set.  That makes it too easy.

 

  1. A good security company alarms the window over the sink.  And the windows on the second floor, which often access the master bedroom-and your jewelry.  It’s not a bad idea to put motion detectors up there too.

 

  1. It’s raining, you’re fumbling with your umbrella, and you forget to lock your door- understandable.  But understand this: I don’t take a day off because of bad weather.

 

  1. I always knock first.  If you answer, I’ll ask for directions somewhere of offer to clean your gutters.  (Don’t take me up on it.)

 

  1. Do you really thing I won’t look in your sock drawer?  I always check dresser drawers, the bedside table, and the medicine cabinet.

 

  1. Helpful hint:  I almost never go into kids’ rooms.

 

  1. You’re right: I won’t have enough time to break into the safe where you keep your valuables.  But if it’s not bolted down, I’ll take it with me.

 

  1. A loud TV or radio can be a better deterrent than the best alarm system.  If you’re reluctant o leave your TV on while you’re out of town, you can buy a $35 device that works on a timer and simulates the flickering glow of a real television.

 

  1. Sometimes, I carry a clipboard.  Sometimes, I dress like a lawn guy and carry a rake.  I do my best to never, ever look like a crook.

 

  1. The two things I hate most: loud dogs and nosy neighbors.

 

  1. I’ll break a window to get in, even if it makes a little noise.  If your neighbor hears one loud sound, he’ll stop what he’s doing and wait to hear it again.  If he doesn’t hear it again, he’ll just go back to what he was doing.  It’s human nature.

 

  1. I’m not complaining, but why would you pay all that money for a fancy alarm system and leave your house without setting it?

 

  1. I love looking in your windows.  I’m looking for signs that you’re home, and for flat screen TVs or gaming systems I’d like.  I’ll drive or walk through your neighborhood at night, before you close the blinds, just to pick my targets.

 

  1. Avoid announcing your vacation plans on your Facebook page.  It’s easier than you think to look up your address.

 

  1. To you, leaving that window open just a crack during the day is a way to let in a little fresh air.  To me, it’s an invitation.

 

  1. If you don’t answer when I knock, I try the door.  Occasionally, I hit the jackpot and walk right in.

 

 

Sources:  Convicted burglars in North Carolina, Oregon, California, Kentucky, security consultant Chris McGoey, who runs crimedoctor.com and Richard T. Wright, a criminology professor at the University of Missouri-St. Louis, who interviewed 105 burglars for his book Burglars on the Job.

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In condo resale, get it in writing

January 21st, 2010

Here is a great information article written by Jim Goldsmith. Esq.  It really gives us some great information about what people need to look for when they are dealing with Condos or Home Owner Associations.————-

If your transaction involves a homeowners’ association, you need to know what’s required by the Uniform Planned Community Act.

In a condo resale, an owner must provide to the buyer a Certificate of Resale and a copy of the declaration, bylaws and rules and regulations of the association. Until these documents are in the hands of the buyer — and for five days thereafter — the buyer can terminate the agreement for any or no reason.

The requirements of the Uniform Planned Community Act aren’t difficult to understand — but problems do arise. A common one involves the association that refuses to issue a certificate more than 30 days in advance of settlement. The delay gives the buyer a longer opportunity to terminate the agreement and, unlike a termination based on a contingency, the buyer doesn’t have to conduct an inspection or have any reason whatsoever for terminating.

As a listing agent, is there anything you can do to shorten a buyer’s opportunity to terminate the agreement? Yes. Order the Certificate of Resale in writing and remind the association of these statutory requirements:

1) The law provides that: “The Association, within ten (10) days after a request by a unit owner, shall furnish a certificate [of resale] and copies of documents necessary to enable the unit owner to comply with this section”  (Section 5407(b)) and

2) The law also provides that the association may be subject to a suit for damages for failing to comply with the law, including a claim for punitive damages in the case of a willful violation (Section 5412). 

Putting a seller’s request for the certificate in writing is always the best practice. I encourage listing agents to prepare a standard order form to assist the seller in obtaining promptly issued certificates. 

To be fair to homeowners’ associations, there is a reasonable basis for delaying the issuance of the certificate. The Planned Community Act provides that a buyer is not liable to the association for unpaid assessments and fees that are greater than the amount stated in the certificate. For that reason, associations like to wait until the last minute to make sure they have captured every fee the owner owes.

It’s safe to say, however, that the association would not be liable for fees and assessments greater than the amount reported in their certificate as long as the report was accurate to the date issued. A prudent association would also include the dates when future fees are due and would also want to report whether any assessments are planned. 

Buyers certainly have an interest in receiving accurate, up-to-date certificates of resale. After all, a buyer would not want to be stuck with an assessment or fee charged by the association after it issued its certificate but before the date of settlement. There is no reason why buyers, at their own expense and out of an abundance of caution, could not order a second certificate to be issued immediately before settlement. 

A better understanding of the Uniform Planned Community Act and its provisions will help you better protect your sellers and buyers.

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