Thinking of buying a short sale?

All buyers want to get the lowest price on everything they buy.  Buying real estate is no exception.  In fact, it’s one of the largest purchases we make so it’s even more crucial to get the best “deal.”  This is why many of today’s buyers are considering a short sale or foreclosure. 

I find that more buyers are interested in short sales than foreclosures.  They think that foreclosures are bad – the bidding process is too complicated, they don’t want the competition of other bidders, it takes too long to close, the property is in bad condition, etc.  Buyers don’t realize that a short sale could have all the same issues. 

A short sale is when the seller is in financial distress and does not have enough equity in the property to sell at current market value plus all their closing costs.  Basically, it is a pre-foreclosure.  The sellers are headed to foreclosure but are tying to sell at a (more) minimal loss.

In negotiating on anything, the more you know about the other party the better.  You can make certain assumptions about them.  So, if you are a buyer who is interested in purchasing a short sale, you already know that your seller is in financial distress and must sell ASAP.  But, this does not necessarily mean that you will get a great “deal.” 

The sellers are still trying to get the highest price they can.  And, the bank will want the same.  The less the loss is to both, the better.  So, don’t automatically assume that you are getting a great “deal” just because the property is listed as a short sale. 

And, there is nothing “short” about a short sale!  This is not a normal sale where you have a buyer willing to offer certain conditions and a seller willing to accept certain conditions.  Not only do you have to negotiate all the terms of the sale with the seller but then it has to be approved by their mortgage company(ies).

Most short sales never close.  Most short sales end up as foreclosures.  Why?  Because they are not “short” as the name suggests.  (Short in this case means that the sale will be short or less than the amount owed.)   And, time is a factor but the process is long.

Still interested in buying a short sale?  The Realtor Magazine has a great article on what to expect.  Click here to read “Making an Offer on a Short Sale? What You Need to Know.”

For more information on building, buying, selling or leasing commercial or residential property anywhere in the world, contact Nicole Tucker, licensed agent with Keller Williams, Dallas Preston Road office at 972-992-8204 or visit my website at http://www.NicoleRE.com.
Nicole Tucker ~ Making Real Estate Real Easy!

Those Who Wait Will Pay Thousands More This Spring

Waiting a few extra days or weeks to purchase a home this spring could cost buyers thousands of extra dollars as the office of Housing and Urban Development (HUD) implements several changes for loans guaranteed by the Federal Housing Authority (FHA).

Coming just weeks before the April 30 deadline for the Home Buyer Tax Credit and just days after the March 31 expiration of the Federal Reserve Board’s mortgage backed securities purchase program (which has kept home loan rates artificially low for over a year), these FHA changes make it even more important to act now to save big.

Here are a few reasons why:

On April 5th, the cost of required up-front mortgage insurance for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with a $7,000 down payment, the up-front mortgage insurance will increase by $965. Up-front mortgage insurance is typically financed in the final loan amount so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower both upfront and monthly.

Later this spring, the amount of money that a seller can return to the buyer from their sale proceeds will be reduced from 6% to 3%. The reduction in these “seller concessions” can increase the amount of cash a buyer will be required to pay at closing by $6,000 for a home purchase of $200,000.

There is only one way to avoid being affected by all of these costly changes that lie ahead – submit all FHA mortgage applications by the last week of March.

Courtesy of Team Mistowski, Supreme Lending

For more information on building, buying, selling or leasing commercial or residential property anywhere in the world, contact Nicole Tucker, licensed agent with Keller Williams, Dallas Preston Road office at 972-992-8204 or visit my website at http://www.NicoleRE.com.
Nicole Tucker ~ Making Real Estate Real Easy!

Teacher and public service program for 1st Time Buyers, or that haven’t owned a home in the past 3 years

Eligible Borrowers:

* Professional Educators: A full-time Texas classroom teacher, teachers aide, school librarian, school nurse, school counselor. Must be employed by an ISD.

* Homes for Heroes: A full-time, paid fire fighter, peace officer, corrections officer, juvenile corrections officer, county jailer, EMS personnel or public security officer working in the state of Texas.

* Reside in Texas

* Meet the income and home purchase price limits

* Meet standard mortgage underwriting requirements demonstrating credit worthiness

* Occupy the purchased home as their primary residence

* First Come First Serve

* Buyer must attend First Time Homebuyer Class

* Income Tax Recapture Provisions Apply

* Can be used in conjunction with IRS tax credit

* Cannot be combined with MCC Program

* FHA Loans Only

* 3% of total loan amount as a grant towards down payment

For more information on building, buying, selling or leasing commercial or residential property anywhere in the world, contact Nicole Tucker, licensed agent with Keller Williams, Dallas Preston Road office at 972-992-8204 or visit my website at http://www.NicoleRE.com.
Nicole Tucker ~ Making Real Estate Real Easy!

Heating Your Home Efficiently‏

Regardless of what the weather brings this winter, heating your home efficiently is probably something on your mind. Keeping your home a comfortable temperature when the weather turns bad doesn’t have to be a financial drain. Here are some places to start:

 Stopping Air Leaks

The first step to making your home more heat efficient is to identify air leaks. Common air leak sources such as recessed lights, attic entrances, doorframes, window frames, ducts (which we’ll cover next) and electrical outlets can be a big drain of heat and money. You can check for air leaks yourself by walking through your home with a lit incense stick (horizontal smoke indicates a leak), or you can hire a technician for a more thorough inspection. Simple fixes like sealing around outlets and switches, caulking gaps in the framing, and plugging gaps surrounding pipes will typically result in noticeable savings.

 Duct Problems

One of the most important systems in your home may be quietly wasting your energy dollars. Often overlooked, typical duct systems lose 25-40% of the heating or cooling energy put out by the central furnace, heat pump, or air conditioner. Common duct system problems include:

• Leaky joints or visible holes in the duct surface
• Disconnected ducts that have fallen away from each other
• Inadequate or poorly finished duct work
• Un-insulated or poorly insulated ducts in attics and crawlspaces

 

Most duct repairs should be made by or with the help of a trained professional, especially those that will take place in unconditioned spaces. A qualified pro can also help you more accurately assess the duct problems that you have. If you decide to make minor duct repairs on your own, keep in mind that duct tape is usually only intended as a temporary fix. Silicone caulking or cement with mastic are better sealing options. Improving your duct system efficiency can cut your annual utility bills by as much as $300, and will improve the overall air quality in your home.

 Keep your Home Insulated

Properly insulating your home is one of the most cost-effective ways to cut down on your energy loss. Improving the insulation in your home can cut your heating and cooling costs by as much as 30%, and will create a more uniform, comfortable temperature in your home. Better insulation will also help decrease outdoor noise. Check the insulation in your attic, ceilings, exterior and basement walls, floors, and crawl spaces to see if they meet recommended standards for your area. Insulation is measured in R-values: the higher the R-value, the less transfer of heat through the material. Typically the easiest and most cost-effective way to improve your home’s insulation is to add insulation to your attic.

 Fireplace Issues

Despite their undeniable aesthetic appeal, fireplaces are not desirable in terms of energy efficiency. Only about ten percent of the wood’s energy is transferred to the room as heat, the rest escapes up the chimney.. When in use, the fireplace also pulls cold air into your home through cracks and leaks, and when not in use the brick and stone mass of most fireplaces readily conducts heat from your home to the outside. To minimize energy waste from the fireplace in your home, make sure the damper or flue is shut tightly when the fireplace is not in use. Consider the benefits of things like tempered glass doors, fireplace inserts that seal dormant openings, and heat exchangers that recover some of the energy that would otherwise be lost.

 Thermostat Solutions

That little box on the wall can be a tool for big energy savings. You can save up to 3 percent for every one-degree that you lower the temperature in your home over a 24-hour period in winter. You can also save up to 10% annually in your heating and cooling bills by adjusting your thermostat down 10% to 15% for an 8-hour period each day. Turning the heat down while you sleep or while you’re away at work is a simple and logical energy efficiency solution. If the prospect of waking up to a chilly house doesn’t excite you, buy a programmable thermostat. They are inexpensive and adjust the temperature in your home based on the schedules you determine.

 Ceiling Fans

While most people think if ceiling fans as a cooling solution, they can also help maintain a warm temperature in your home during winter. Running a ceiling fan in reverse circulates rising warm air back down to living areas. Consider ceiling fans for your home, particularly if you have rooms with high ceilings that seem to stay colder. Ceiling fans vary in price depending on things like material and size, but many are inexpensive and easy to operate.

For more information on building, buying, selling or leasing commercial or residential property anywhere in the world, contact Nicole Tucker, licensed agent with Keller Williams, Dallas Preston Road office at 972-992-8204 or visit my website at http://www.NicoleRE.com.
Nicole Tucker ~ Making Real Estate Real Easy!

To Sell or Not to For Sale By Owner…?

Everyone wants to save money.  And, for most of us, our home is our largest (financial and emotional!) investment.  So, some sellers want to keep the control of their personal life and save money at the same time so they think a For Sale By Owner is great. 

But, before you choose this, read “7 things to consider before selling your own home” here.

One thing the article does not mention is that most buyers are already working with their own real estate agent.  So, not only will they have the knowledge, experience and skills of an agent on their side while you will not, in most areas, it is customary that the seller pay all the real estate broker fees.  So, while ALL terms of a sale are negotiable, in most cases, the seller will pay for the buyer’s real estate representation.  So, if you are paying for the buyer’s agent, don’t you think that you should have your own representation too? 

You may say that you won’t pay for a buyer’s broker commissions but with a buyer who already has representation, that could be a huge factor in your sale.  Another seller most likely WILL pay their broker’s fees. 

And, you may say that you will only work with buyers who do not have an agent.  A real estate agent pre-screens buyers for many factors.  Thus, you can be more assured that a buyer who has an agent is pre-qualified, has their down payment and closing costs funds available, and is educated on the buying process.  An uneducated and unprepared buyer can waste a lot of your time and cause you emotional distress!  At the very least, they could delay your sale.  These are all things you do not need when you are ready to sell your property.   There are just too many advantages to working with a professional real estate agent who is experienced in your area.

For more information on building, buying, selling or leasing commercial or residential property anywhere in the world, contact Nicole Tucker, licensed agent with Keller Williams, Dallas Preston Road office at 972-992-8204 or visit my website at http://www.NicoleRE.com.
Nicole Tucker ~ Making Real Estate Real Easy!

HUD Waives FHA Rule on Flipping

In an effort to expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties, HUD has announced a temporary waiver of the 90-day flipping rule. The waiver takes effect February 1, 2010, and lasts for one year, unless otherwise extended or withdrawn by HUD.
The waiver is limited to those sales that meet the following conditions:
1.	All transactions must be arms-length, with no identity of interest between the buyer and seller or any other parties participating in the sales transaction, including:
	•	Seller must hold title
	•	LLCs, Corporations and trusts must be established in accordance with state and federal law
	•	No evidence of previous flipping within 12 months
	•	Evidence that property was marketed openly, such as via MLS, auction, FSBO
	•	The waiver is limited to forward mortgages and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program
2.	If the sales price of the property is 20% or more above the seller’s acquisition cost, the waiver will apply only if the lender meets the following conditions:
	•	Significant work has been done to the home (documented by a second appraisal verifying that legitimate repairs and rehabilitation have been done to substantiate an increase of more than 20%); or,
	•	In cases where no work has been done, the appraiser must provide explanation to support the increase since the prior transfer; and,
	•	A property inspection must be provided to the buyer prior to closing. (The lender may charge the borrower for the inspection.) The inspector does not need to be FHA approved, but must have no interest in the property, must not receive compensation other than from the lender and may not be involved with the repairs recommended from inspection.
The complete text of the waiver — including what the inspection must include — is available on the HUD website at: http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf

 

For more information on building, buying, selling or leasing commercial or residential property anywhere in the world, contact Nicole Tucker, licensed agent with Keller Williams, Dallas Preston Road office at 972-992-8204 or visit my website at http://www.NicoleRE.com.
Nicole Tucker ~ Making Real Estate Real Easy!

What’s Ahead for Home Loans in 2010

This year could bring significant changes from 2009 for those seeking home loans. Over the last year, home prices fell to 2003 and earlier levels in many parts of the country. In addition, home loan rates declined to the lowest levels on record and this combination led to the highest home affordability levels ever recorded. Here’s a recap of what happened in 2009 and what you need to know for the year ahead.

Would You Like a Sweetener with that Rate?

Interest rates throughout 2009 were artificially low. That’s because in late 2008, the Federal Reserve put into place a program for purchasing Mortgage Backed Securities with the intention of lowering mortgage rates. They were successful with reported rates by Freddie Mac falling below 5.00% several times in 2009.

Without this program mortgage rates would have been at least 1.00% higher, and potentially even higher than that. Did you know that a change of 1% in a home loan rate impacts the amount someone can borrow by roughly 10%? For example, if rates are in the low 5.00% range today and they shoot up to the low 6.00% range, $250,000 home buyers may become $225,000 home buyers. 

Look for rates to return to 2008 and previous levels as the Fed ends the program on March 31, 2010. While rates will not immediately increase to 6.00% or higher, know that without additional intervention, rising rates are inevitable. Expect that under worst case scenarios, rates could dance around the 7.00% range.

Show Me Your Docs

Contrary to what you may see or hear in the media, money is widely available for people who want to finance their homes. There is one caveat, though. People need to be able to demonstrate that they qualify for the loan amount they are pursuing and that they have been willing to repay debt they have accepted in the past.

To obtain financing today, a borrower needs to supply the lender with all documentation pertaining to their income, liquid assets and potentially items related to their credit reporting. The best preparation path to follow is to gather most recent paystubs for 30 days of earnings, two years W-2s with complete tax returns and three months statements, all pages, for any liquid assets used for qualifying.

The free wheeling days of borrowing whatever people thought they could repay are gone. While some exceptions may be granted for strong compensating factors, total debt to income level will be capped at 45%.

If you haven’t checked out your credit reports recently, now is a good time to do so if you plan on seeking financing in the next 12 months. You can pull up your reports for free at AnnualCreditReport.com. Examine your reports for any inaccuracies and work to get them corrected prior to seeking financing. You can also seek assistance from your mortgage professional.

Have We Hit a Bottom in Housing?

If you simply look at the data that is reported, one could surmise that the bottom in U.S. home prices was hit in 2009. One nationally respected index for home price reporting, the S&P/Case-Shiller Home Price Indices, indicates that home prices turned for the better around mid-year in 2009.

While all markets are different and some may continue to show signs of weakness, most communities have demonstrated strength and should continue to do so. However, some potential headwinds do exist for the second and third quarter of 2010, following the expressed expiration dates of several stimulus programs: The Mortgage Backed Securities purchase program and home buyer tax credits, both of which are directed at the housing and the mortgage markets.

Foreclosures and short sales will also continue to influence many of the hardest hit markets as unemployment and resetting adjustable rate mortgages weigh on distressed homeowners.

Dates to Remember

Two dates lie on the horizon that will impact interest rates and potentially home prices. The first program scheduled to end is the Federal Reserve’s program for purchasing Mortgage Backed Securities. Announced in November of 2008, the Fed began purchasing $1.25 trillion in mortgage bonds in 2009 which will culminate at the end of March. As the intention and result of this program was to lower rates, mortgage rates will likely begin to rise after the program concludes.

In addition, April 30, 2010 is the last day to enter into a home purchase contract and still potentially qualify for a federal income tax credit of up to $8,000 for first-time home buyers and up to $6,500 for repeat home buyers. The credit can be claimed only on contracts that close by June 30, 2010.

Act Now…Not Later

While no one knows for certain what the future holds, one thing does appear clear. Home loan rates and home prices both will be higher in the future. If you or anyone you know is looking to purchase or refinance a home, waiting could be costly!

For more information on building, buying, selling or leasing commercial or residential property anywhere in the world, contact Nicole Tucker, licensed agent with Keller Williams, Dallas Preston Road office at 972-992-8204 or visit my website at http://www.NicoleRE.com.
Nicole Tucker ~ Making Real Estate Real Easy!

The sky is falling?! …don’t believe it.

“December’s drop is largest in more than 40 years” reads the headline.

The headline and numbers are sometimes deceiving.  Just because it was the highest drop doesn’t tell the whole story.  The drop was so drastic BECAUSE the previous months’ were so high.  The increase was in result of low interest rates, great pricing AND the government’s Tax Credit. 

The original First-time Homebuyer Tax Credit was set to expire in November.  So, many buyers had planned to close and fund to meet this November 30th deadline.  Thus, not many buyers were scheduled to close in December.  Some still did, yes.  Properties are bought and sold every day.  December and other winter months are typically the slowest (i.e. lowest sales numbers) months because buyers are busy preparing for and enjoying the holidays.  And, weather can keep people indoors.

Read the full article here. And be sure to look at the graph and note the increase every previous month AND compare December 2008’s number to December 2009’s “sharpest fall since the Great Depression” number.

The negativity of the press is their way to catch your attention.  But be sure to examine all the information so you can get the real story.

And, always consult your local real estate expert for the actual numbers for your area. 

For more information on building, buying, selling or leasing commercial or residential property anywhere in the world, contact Nicole Tucker, licensed agent with Keller Williams, Dallas Preston Road office at 972-992-8204 or visit my website at http://www.NicoleRE.com.
Nicole Tucker ~ Making Real Estate Real Easy!

First Time & Distressed Property Home Buyers

First Time & Distressed Property Home Buyers

What are first time buyers doing?

The tax credit extension and expansion in November has fueled new discussion about home buyers and the housing market in 2010. Here’s a look at first-time buyers in 2009.

1. The median age is 28, significantly down from where it was in 2005 at 32.
2. Location or Neighborhood was the No. 1 “must-have” for 36% of buyers.
3. 2 out of 3 sellers paid at least part of the buyer’s closing costs.
4. 76% used their own savings for the down payment.  
5. 1 in 4 had help from their family for the down payment.

As elevated levels of distressed properties are expected to continue for the next few years, here is a glimpse of buying a distressed property:

1. 27% of foreclosures* were purchased by investors.
2. 47% of  distressed* properties were purchased by first-time buyers.
3. 89% of those first time buyers that purchased a distressed property were motivated by the $8,000 tax credit.
4. 7 in 10 agents have seen an increase in multiple offers. 
5. Approximately 3 out of 5 agents discuss the differences between buying distressed and traditional properties at the buyer consultation.

          * Distressed – Short Sale and REO, Foreclosure – REO Only

 

For more information on building, buying, selling or leasing commercial or residential property anywhere in the world, contact Nicole Tucker, licensed agent with Keller Williams, Dallas Preston Road office at 972-992-8204 or visit my website at http://www.NicoleRE.com.
Nicole Tucker ~ Making Real Estate Real Easy!

TEXAS RANKS 29TH IN 2009 HOME FORECLOSURES

HOUSTON (Houston Chronicle) – Texas ranked 29th in state foreclosure rates for 2009, with 1.06 percent of the state’s total housing units receiving at least one foreclosure filing, according to a report by RealtyTrac.

That calculation includes default notices, scheduled foreclosure auctions and bank repossessions.

Overall, 100,045 housing units received foreclosure filings in Texas last year, up 4 percent from 2008 and up 18 percent from 2007.

In comparison, Nevada posted the highest foreclosure rate in 2009, with over 10 percent of its housing units receiving foreclosure filings. Colorado was tenth in the nation, with 2.37 percent of its units receiving foreclosure filings.

For more information on building, buying, selling or leasing commercial or residential property anywhere in the world, contact Nicole Tucker, licensed agent with Keller Williams, Dallas Preston Road office at 972-992-8204 or visit my website at http://www.NicoleRE.com.
Nicole Tucker ~ Making Real Estate Real Easy!