Category Archives: organizing

“KNOW BEFORE YOU OWE” MORTGAGE FORMS

Stack of DocumentsJust as we are getting familiar with the implemented 3 page Settlement Statement, formerly called the HUD-1 form, we will have another change to the new 5 page Closing Statement that must to be in place by August 15, 2015. The other form that will change is the Loan Estimate which will replace the old Good Faith Estimate. When you compare the two (3 page Settlement Statement and new 5 page Closing Statement) you will see some significant changes.

Some of the changes you will immediately notice:

  • The 5 page Closing Statement has to be in the borrower’s hands three business days before closing.
  • At the closing table the 5 page closing statement replaces the 3 page Settlement Statement HUD-1
  • Another change is the name from Settlement Statement to Closing Statement.
  • The Settlement Statement was broken down in line numbers from 100 to 1400
  • The Closing Statement is broken down in sections from A to J and in addition you will see the loan terms, Projected Payments, Cost at closing, loan cost, and any other cost you will face at the time of closing.

The reason for the changes to the Closing Statement is to help borrowers understand all the options that are available to them. They can then choose the deal that’s best for them and later at the closing table they can avoid costly surprises.

The Loan Estimate needs to be in the borrowers within three business days after they submit a loan application. This estimate provides a summary of the key loan terms like loan amount, interest rate, monthly principal, and interest. It also gives you the estimated loan and closing costs. All the lenders have to use the same form after August 15th 2015 and this will make it much simpler for the borrower to shop and compare different mortgages.

A PICTURE IS WORTH MORE THAN A THOUSAND WORDS

We all have heard that saying. Sometimes, what you intended to communicate with a picture is maybe not what others are understanding.

postiveWhen you use pictures for marketing make sure that the picture describes exactly what you intend. You do not want to communicate something negative when your intention was to communicate something positive or welcoming.

Think of it this way. You are new to the city and walking into an office you need to visit. You have the choice to speak with a person that is standing in the room with their arms crossed and have smile on their face or the other person that looks more relaxed with their arms by their side with a big smile on their face.  Personally I would bypass the first person and go straight for the person who appears relaxed with the big smile.

Now why would you use pictures in your marketing that communicates “Back Off” rather than “Welcome, how can I help you?”. Is it because others did it? Just because others do it does not mean it is the right thing to do.

Is it because you thought it looks great? Consider asking someone independent who will give you an honest opinion.

Just because a picture was taken by a professional photographer does not mean it is the right picture for your advertising. Sometimes less is more.

TENANT SCREENING; A MUST WHEN RENTING

working like a dogWhen you are a landlord there might be a time when you need to find a new tenant for your rental unit. Keep in mind the largest cash flow killer for a landlord is tenant turnover and the better you screen your tenants the better the chances of finding a tenant who will pay the rent and remain in the unit longer. This will help your cash flow.

One thing you should consider is running a separate credit and background check on each occupant who is over 18 years old. There are several great tenant screening companies out there who can help you with this. They not only run the credit and background check but also the potential tenant’s rental history. When you have a potential tenant call, make an appointment to meet with them. Preferably in person!

Have every potential tenant that is over 18 fill out a separate rental application. Compare the rental application information with their issued state ID.  Look for discrepancies or lapses in rental history or rental payment. When you find things like this ask about them.

Make certain you call the potential tenants previous landlords, not the current one. Call as far back in history as you can. This will give you a better idea as to whether they will be likely to pay the rent. Checking with the current landlord might not tell you the true relationship they had with this tenant because they are glad that they are moving. Just because they did not get along does not mean they will not get along with you.

Drive by the current rental unit the potential tenant is occupying right now. How do they take care of their current rental? Is it neat and clean or is it trashy? This will tell you how this potential tenant might take care of your rental. Run a zoning violation search against the rental the tenant currently occupies. This will also give you great insights on how they care for the outside of the property.

You might also check their online presence through FB, twitter, or other social media sites. You might be surprised what you can find.

When you meet and speak with them, what is the first impression you are getting? How well do they speak about their current or their past landlords? Do they get upset when you tell them that you have more than one application for the unit and it will take no longer than a few days to make a final decision?

If you are a landlord who allows pets in the rental unit seek information about the potential renter’s pets. Also check for local ordinances in place that either excludes certain pets. A valid and current pet certification may have to be held by the owner.

During your conversation with them set your expectations for them on how to treat the rental unit and the usage limitations set forth by zoning ordinances of the city. Make them aware of what actions they may take that could cause them to lose their rental deposit. You might also consider giving them a handout about this topic.

Make sure you are charging a rental deposit. Use a move-in and move-out check list as well.

“You can not always control circumstances, but you can control your own thoughts.”

This quote from Charles Popplestown came to mind as I received a very long email from a possible Real Estate recruit. This explained to me why she hates doing certain tasks in her current function and why she thinks she will not be doing them later.

Do you know who your customers are and where they come from?

 It is easy for all of us to complain about this or that and/or maybe him or her. It is so much harder to look at the problem and offer a solution. When a company is recruiting, that is exactly what they are looking for. There are times when a company is hiring because they are faced with a situation (opportunity) they could not solve and they are now looking for the solution externally.light

In our business we strive to receive referrals and also to give referrals. Before we receive the referral business we have to earn it. Referrals, and the referral business, do not come without hard work, dedication, and offering of solutions to our current customers and clients.

This not only holds true in the world of our business, it holds true for all types of jobs and employment.

Be the solution to an issue and don’t become the issue. When you have an issue, offer a solution or an idea to a solution.

TYPES OF LOANS THAT ARE AVAILABLE TO CONSUMERS FOR PURCHASING A HOME

Coin Dropping Into Piggy BankIt would be great when we could all pay cash for a home. Unfortunately most are not in the position to do this and must obtain a loan to purchase our home.

There are so many types of loans that it can be very confusing as to which type of loan to use. Some loans require you to have some sort of down payment. There are others that don’t have down payments. There is the conventional loan, loans for rural areas, for public servants like teachers, police officers and fire fighters. There are loans for veterans and their families and also rehab loans.

Here is some information on the more common used loans:

Conventional loan

This type of loan comes has multiple terms to choose from, between 15 and 30 years. You have a consistent mortgage payment for budget planning purposes. You must have a down payment and depending on the lender you are working with it can be up to 20% of the purchase price.

VA loan

A VA loan is a loan guaranteed by the Department of Veterans Affairs. If you are a veteran, member of the military, or a surviving spouse of a veteran, you can apply for this type of loan. There are some stipulations the VA puts on a veteran or their surviving spouse to be able to qualify for this loan. You should speak with a VA approved mortgage servicer/lender about your specific situation.

FHA loan

An FHA loan is great for a first time home buyer but you DON’T have to be a first time home buyer to qualify for this type loan. Many times the down payment is less than the 20% required for a conventional loan and the qualification and credit requirements are not as stringent. The FHA loan is an insured loan that is backed by the US Federal Housing Administration mortgage insurance organization. Only FHA-approved lenders can provide this type of loan to you.

USDA loan

This loan is for rural areas of the US. You can find out if your rural home purchase qualifies for a USDA loan by contacting the local USDA office within your state. With the USDA Rural Development Single Family Housing Guaranteed Loan Program there is no down payment but you need to buy a home that is in a USDA eligible area.

There are many more types of loan programs. You can find out what type of loan would be best for you and your family by contacting your favorite loan officer, or you go to our resource page where we have several of them listed for your convenience.

FIRST THINGS FIRST WHEN YOU ARE PLANNING ON SELLING YOUR HOME

Pad of Paper & PenWhen you decided to sell your current home, whether to upgrade, downgrade, or circumstances dictate you have to sell, there are several things you truly should do before you have your agent put the house on the market.

You need to keep in mind that you are SELLING A HOUSE. Nothing less! Nothing more!

When it comes to selling a home less is more.  Just visit a builder’s model home. You will never see family pictures on the wall, sports trophies cluttering up shelves, or the cabinets and walls cluttered. The walls are always painted in a more neutral color. The goal is for the potential buyer to walk into a home, fall in love and immediately being able to see themselves and THEIR furniture in the home. Not YOURS.

You already have been sold on your home and now it is time for you to sell your home to a different buyer.

The first thing you should do is to de-clutter each room. Either store or sell what you no longer need. On a side note you could inventory the contents for insurance purposes.  Because when you have a loss the first thing an insurance company will ask for is a detailed inventory list of what is missing or damaged. When you consider storing your items do not use your garage. Your garage is part of the house you are selling and not your store room. Buyers need to be able to picture their vehicle in the garage and not the boxes you stored in it.

Give each room a good cleaning. Let’s find the dust bunnies that are hiding in the corner and under the bed. You would be surprised what you will find or what you have been missing. Give each wall and ceiling a fresh code of paint. You don’t have to use the $40 gallon paint, buy the more reasonable $10 gallon paint and have the store tint it with a neutral color. You don’t have to like the paint. Just don’t paint everything constitutional white. Different colors will add a different feel in each room.

When the carpets are over 10 years old, torn or dirty beyond cleaning or maybe screaming 70’s 80’s look consider replacing them as well.

The more your house speaks to a potential buyer the faster a home will likely be sold. When you are looking for more ideas or advice just contact me and I will be glad to help.

Can I sell my home right now or should I wait a little longer?

questionIn several corners of the US, the housing market has started to pick up but in the majority of the US you can feel the anticipation in the air of sellers who are ready to make the move to put their home on the market. However, they may be holding off because they don’t know where to turn for answers to their questions.

We all know different areas have been hit by the downtrend in home sales somewhat harder than others and the home prices have been low. There are many areas who have not seen a home sale in over 6 months. This makes things a bit interesting for everyone wanting to sell.

When you have made the decision that it is time to put your home on the market, or maybe you were put in a situation forcing you to sell, the first thing I recommend is to interview several real estate agents to help you in the process.

During the interview you should try to learn about the qualifications of the agent. If those qualifications are suitable try building a relationship with the agent. Keep in mind that the relationship with this agent could last a long time through the selling process and you are building the relationship with the agent, not the company they work for. I have personally seen homes that received an offer after 4 days of being put on the market, but did not close for another 5 to 6 months. There have been homes on the market for 6 to 8 months but closed in less than 2 weeks.

You can tell what the sales market is like in your neighborhood by watching how many sales signs there are and how long they are posted in front of the homes. Homes that have signs posted in their yard for longer periods of time may indicate that the market is not good at the present time and you may need to wait to put the house on the market. Yes, the interest rates are still low and there are buyers out there who want to buy. But sometimes you need to bide your time and wait just a little longer, unless of course your situation does not allow you to wait.

If you need to sell due to your circumstances, it is especially important to have a solid relationship with the agent you work with. Keep in mind that there are some agents that are better a buying and others that are better at selling. The one you used to buy your home might not be the right one to help you sell it. This is not always the case but you need monitor this when using the same agent. During the interview you need to find out the agents experience with a slow market as well as their experience with lenders and short sales. This is useful in case you receive an offer that is less than the amount needed to cover your mortgage.

SHORT SALES ARE STILL PART OF TODAY’S MARKET

inboxEven in today’s market there are many homeowners who are still considering selling their home through the short sale process due to personal hardships they are facing.

Hardships can take on many forms. The loss of value in a home or not budgeting your income well enough are two examples that can lead someone to decide to short sell their home but they are not really hardships. To qualify for a lender approved short sale you need to have a valid hardship such as a divorce or death for instance.  There are many more valid hardships.

Some homeowners will decide strategically (voluntarily) to default on their mortgage even so they do have the ability to make their monthly payment and don’t have a valid hardship. They do this with the intent on achieving approval for a lender approved short sale. Just because you voluntarily default on your mortgage does not mean you will receive approval for short sale. You will still need to prove the validity of your hardship prior a lender approving you for a short sale.

As buyers and sellers we need to be informed of the ins and outs of a short sale while keeping in mind, that when you as the seller opt to sell your house through a short sale, you might not be able to buy anther home for about 2 -3 years. This would be at the discretion of the servicer and what type of mortgage you had previously.

As the buyer you might need to have some patience during the closing process because it is the seller’s lender who has the final say so on the sale of the house and not the seller. You also need to be willing to be pre-approved (not pre-qualified) for a loan. Many homes are being sold “ASIS”. You can have your home inspection but most of the time the seller is not able to make any repairs.

For additional information about short sales or selling real estate in general feel free to contact our office.

HOW DO I PRICE MY HOME?

Magnifying Glass and U.S. Fifty Dollar BillQ: I’m about to put my home on the market. What factors should I consider when determining a listing price?

A: The ten main factors that influence the value of your home are:

1. Interest rates: The lower the interest rates, the more buyers can afford to pay.

2. Supply and demand: Are ’for sale’ signs springing up all around the neighborhood? If there are a number of homes similar to yours on the market, consider them your competition. What can you do to set your home apart and make it potentially more desirable than the other listings? This will attract more buyers. On the other hand, a small number of homes for sale can result in competing bids that drive prices up.

3. Economy: Is the economy improving or sliding? This will affect buyers’ confidence in their ability to manage debt.

4. Location: Are you in a desirable neighborhood, with key services such as schools, doctors, and shopping nearby? Are there factors that make your neighborhood less desirable, such as environmental issues or traffic problems?

5. Condition: Do you have an older home that needs updating to modern standards? Have you kept up with repairs? Is the house clean? Does your house make a good first impression? (This is called “curb appeal.”) How much can you reasonably do to fix it up and still get your fix-up investment back in the sale?

6. Timing: Do you need to sell quickly or can you wait for a better time in the market?

7. Size: Will your home appeal to a growing family or to those who are downsizing?

8. Amenities: Does it include features that are popular, such as low-maintenance landscaping or granite counter tops?

9. Terms: How flexible are you with respect to the sale? What’s excluded? If you are downsizing and have substantial equity, have you considered offering financing? Carrying financing can make your home very appealing to someone who cannot get approved for a loan and also help you sell for the maximum price.

10. Attitude: How committed are you to selling now?

To determine your home’s value:

  • Research the housing market in your area. Browse the Internet, local newspaper ads and free ’For Sale’ publications. Visit open houses in your neighborhood to get a general idea of the current market.
  • Get a comparative market analysis (CMA) from a REALTOR®. A CMA compares homes that are currently available and those that have sold in your neighborhood in the past year. The more similar the features — square footage, number of rooms, lot size, etc. — and the more recent the data, the more accurately it reflects the current market. Don’t confuse listing price with sold price — the most important factors in the CMA. REALTORs® usually do CMAs for home sellers at no charge.
  • Have your home appraised. An appraisal estimates your home’s market value. A lender will require an appraisal to finance a prospective buyer. For residential properties, a professional appraiser will either compare your home to similar properties that have sold in the area or, for new properties, estimate how much it would cost to replace the existing structure if it were destroyed.

To maximize your home’s value:

  • Eliminate clutter and clean. The more you can clean your home and keep it tidy, the easier it will be to show, and more buyers will see it at its best.
  • Paint and repair. First impressions count. Improve the appearance of your home with a coat of fresh paint. Take the time to fix any dripping taps, broken tiles or cracked widow panes.
  • Consider hiring a home stager. A professional home stager can help you enhance the selling potential of your home by showing you how to arrange your home to appeal to buyers. Whether it’s rearranging furniture, minimizing belongings, lending you accessories or renting furniture, they work with you to show off your home’s best features. Many will also coordinate hiring professionals to do cleaning, painting and minor repairs should you choose to do this.

What’s the right price?

Generally, aim for your list price to be between 2.5 to 5 percent higher than what you expect the selling price to be. Pricing strategies vary with the market. If it’s sluggish, price lower. If it’s active, price close to your expected selling price to stimulate competing offers.

Remember, your home is easiest to sell when it’s first listed. During the first couple of weeks, you’ll get a flurry of interest on the part of agents eager to preview it for their clients. If you price it too high and they can’t sell it, your home may linger on the market and become old news. Prospective buyers may think you’re becoming desperate and lower their offers. As a result, you could end up having to accept less than you normally would have received.

EASY NO COST SELLER IDEAS TO SELL YOU HOME WHEN YOU ARE IN TROUBLE.

piggy bankMoney is tight and you are faced with having to sell you home but you do not have any money to fix or repair the home? The home then will have to be sold AS-IS.

 

Here are several things you can do to give your home the best chance to sell quickly, even if it needs repairs.

 

Think of what you can do rather than what you cannot do.

 

None of the ideas listed below cost you any money and it is possible they may make you some money! (OK one maybe will but only if you have no other option).

 

  1. In the sellers disclosure identify what needs to be repaired. Better to disclose than to hope they will not see.
  2. Start clearing out and selling items you do not need. Look in every nock and cranny.
  3. Take down all your personal pictures and notes from the walls, desks, tables and refrigerators. Buyers are not interested who is in the house. They want to know about the house.
  4. Vacuum all the carpets in the house including under the bed, couch, and chairs.
  5. Deep clean all of the bathrooms, and the Kitchen. Do not forget behind the stove and under the refrigerator. People will pull the shower curtain to see how clean the shower is.
  6. Take a damp sponge and clean the finger smudges off the walls by the light switches and other places you can find. Don’t scrub hard. Be very gentle.
  7. Clean out overstuffed closets, and if you can, put the excess into storage or sell it.
  8. Organize your kitchen. Get rid of the junk drawer. We all have one.
  9. Clean off the kitchen counter top. If you keep it cluttered, you tell buyer that you do not have enough room to store your items, or the other message you might give them is it will take me months to move out! Or I have too much stuff to move!
  10. Clean out the garage and once again, when you have to store or sell some of the items you have, then do so! Once again, do not use the garage as storage unless you are planning on telling the buyers that the house is too small and does not have enough storage.
  11. Clean up the yard. It will have better curb appeal.
  12. Mow the yard and keep it trimmed.
  13. Ask friends or family members if they maybe have some plants you could plant in your yard when you have none.
  14. Clean your windows and open the curtains to let light in.

 

All these ideas, unless you need to put stuff in to storage, will cost you no extra money. All what this will cost you is your time and effort to get it done.

 

The faster you can sell your home the faster you can get back on track and the faster you might be able to get into a new home. The longer it takes the larger your shortfall will be. In this case time is money.