buying, commitment, Communication, education, Inspiration, organizing, planning, selling, Short sale, Team work, tips

BUYER’S URBAN BUYING TREND IS NOT SLOWING DOWN

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With the downtrend of the market many buyers, first time and seasoned buyers, are rethinking the location of where they will buy their home. Many families moved to the suburbs for various reasons and left the urban lifestyle behind.

The tide is changing and more and more buyers are moving from the suburbs back into the urban areas. There are many reasons why the change in migration. Looking at the buyers, who are currently moving back and planning on becoming urbanites, the reasons are very different but also similar at the same time.

urbanSome of them are looking for the connectivity and closeness of work, home and play. They can just keep the car parked and maybe either walk or take the bicycle to work. Others might just look for the entertainment and closeness to shopping and friends.

I hear many of them talk about the travel time that is spent traveling from their suburban home to their work. Most of the time they would like to spend this driving time with friends or family rather than sitting in the car. Looking at the overall trend the migration from the suburbs to the urban areas will have a steady flow. Suburban lifestyle is not dead by far but the face of the areas will take on a different look.

buying, commitment, Communication, education, Inspiration, selling, Short sale, Team work, tips

WHAT IS A QUALIFIED MORTGAGE (QM)?

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Question Mark Key on Computer KeyboardThe Dodd-Frank Wall Street Reform and Consumer Protection Act, which became federal law on July 21, 2010 used the term “qualified mortgage” (QM) first. You need to envision the QM loan like a funnel were everything needs to filter though and this funnel was given certain government guide lines it needs to meet. Some of this information came from the Qualified Mortgage website and I encourage every buyer to read up on the information.

The type of loan that comes out of the bottom of the funnel is a Qualified Mortgage (QM) that meets certain government standards:

  1. Borrowers Debt-To-Income (DTI) ratios are not to be HIGHER than 43% based on monthly gross income.
  2. Loan terms cannot be longer than 30 years.
  3. Borrowers lending points and fees cannot exceed 3% of the total amount borrowed.
  4. Cannot be a negative amortization loan.
  5. Cannot be an interest only loan.
  6. Cannot have a balloon payment.

Now that you and your mortgage have passed the federal QM rules, you now you need to be able to pass your lenders rules before they lend you the money. This is where I found some borrowers are confused.

Some of their rules might include:

  1. Acceptable credit rating
  2. Acceptable time on the job
  3. Proof of income
  4. Proof of expenses

It is also possible that the borrowers Debt-To-Income (DTI) ratio is LESS than the 43% required by the Feds but at the same time the lender may be using a DTI as little as 35%. This would cause you to not get approved for the loan. Yes, many lenders now use tighter rules than the federal QM guidelines to assure they will not have to foreclose on borrowers because they cannot pay for their mortgage.

When you have further questions feel free to contact us. We are not mortgage advisers but we have connections with some great advisers we seek for advice when we have questions ourselves.

commitment, Communication, education, Inspiration, planning, selling, Team work, tips

IS THE NEIGHBORS DOG STALLING THE SALE OF YOUR HOME?

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Terrier Dog and Cat Sitting on a SofaMany times I receive feedback like this from other agents when they show a property that is listed with me; “The buyer likes the house but the neighbors loud dog, trash, ugly yard is a total turn off”.

There is really not much you can do about your neighbors, especially when it comes to an over the top barking dog. I did see that some homes sold for much less than some of the area comps due to snarling, barking dogs. Many families with kids refuse to buy a home when there is a snarling, barking dog because they are afraid the dog will harm the kids. The barking dog can also be a turn off.

One thing you can do is get with your neighbor. Invite them over and let them hear from your side of the fence how their animals sound when you are trying to have a conversation. During the conversation you might suggest the dog trainer you used to help you train your dog or maybe the doggy daycare you take your dogs to when you are out. A worn out and tired dog is a happy and sleepy dog and has no time to bark.

Also do your homework. Many towns have ordinances in place that does address things like barking dogs. See what ordinance could apply in your case and if you can’t find one during a search contact the town and ask them. They will be glad to help. Not only check for any ordinances but also keep good records of problems just in case you decide to take the case to court. The best scenario would be when the two of you could work it out.

One thing you should not do is threaten the neighbor. Let’s keep it civil.

buying, commitment, Communication, education, Inspiration, organizing, planning, selling, Short sale, Team work, tips

“KNOW BEFORE YOU OWE” MORTGAGE FORMS

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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.

commitment, Communication, education, Inspiration, organizing, planning, Team work, tips

A PICTURE IS WORTH MORE THAN A THOUSAND WORDS

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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.

commitment, Communication, education, Inspiration, organizing, planning, Team work, tips

TENANT SCREENING; A MUST WHEN RENTING

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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.

commitment, Communication, education, Inspiration, planning, selling, Short sale, Team work, tips

HOMEOWNERS THAT ARE FACING FORECLOSURE MIGHT HAVE EQUITY IN THEIR HOME

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saving for collegeIn some areas, where home prices have risen enough, may offer homeowners who were once upside down with their loans alternative options rather than going through foreclosure. Many homeowners who are going through foreclosure might not realize that they now have positive equity and could either refinance their loan or sell the home without having to go through a short sale.

This would be great news for many home owners who were once upside down but is now no longer the case. The interest rate is still low and the home should be easy to sell. This would also help potential buyers because the inventory of homes for sale is low even though we should be at that heart of a great selling season.

When you think you are in an area where the home prices have risen and your homes value has risen with the local market, and you suspect you are no longer upside down with your loan, you should contact first your mortgage servicer and find out if there are now other options for you. You should also contact a local real estate professional or appraiser to let them run an evaluation on your home.

When the evaluations by your agent or appraiser show that the market value of your home is higher than your current total loan amount you owe, you might be able to put your home on the market without having to do a short sale. This would open the market to more interested buyers  other than the investors who are looking for a deal.

The closing date can be set based on the buyer’s qualification when the purchase price is higher than your outstanding mortgage balance. You as the seller would no longer have to ask the lender for final approval to close the transaction. You just close it as a regular transaction.

commitment, education, Inspiration, planning, Team work, tips

ARE YOU TRULY LISTENING?

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Secret Kiss From One Boston Terrier to AnotherI had several situations this week that made me think…..are we truly listening to the person who is talking with us on the phone or who is talking with you right in front of you?

With our busy life and work we all try to multi task and sometimes we forget to focus on what is important right at this moment.

Have you ever had the situation that you where talking to a person, maybe at a meeting, and they checked their phone for messages during you conversation with them and not even ten minutes later they asked a question that you had covered with them not even ten minutes ago?

Were you ever in a restaurant ordering food and the server wrote down your order but had side conversations while taking your order and as you received your order, it was not correct?

Have you ever received a message that someone else took for you while you were out and as you followed up with the message it was not about what the messenger told you it was?

Things like this happen more and more often. We try to do too many things at once and this might be the culprit. The more we try to do at once, the less we accomplish and ultimately create re-work for ourselves and others.

Here are some ideas to help assure that the person you are talking with understands and has listened to you.

On the phone:

  • Ask them open ended questions about what you just presented.
  • Ask the person to paraphrase the information you just told them.
  • Find out if they are in their car talking with you. If they are, reschedule the conversation for a time when they are not driving and don’t have any distractions. Cell services in some areas is not 100% and important parts of a conversation could be missed.
  • Send an email with all of the discussion points and ask them if there are any more questions about the task at hand.  Ask open ended questions to make certain the message you conveyed was understood.
  • If they put you on hold during your phone conversation due to other priorities, reschedule the conversation for another time when they can give you their undivided attention.

When it is a face to face meeting;

If they are distracted by the phone ask them hold their call so there will be no distractions.

  • Do not sit behind the desk. Use a more casual conversation style.

When it was an email message that was taken for you

  • Ask to have the original email forwarded to you.
  • When something is unclear contact the original sender to clarify.

Politeness is the art of choosing among one’s real thoughts.  ~Abel Stevens

buying, commitment, Communication, education, Inspiration, planning, selling, Team work, tips

WHERE DO INDIVIDUALS MOVE TO AND FROM?

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car with mapHave you ever wondered if your county is one of the county’s that is popular area individual’s move to or away from?

You would be surprised to see that some of the counties within certain states that you think would be in the top 10 of areas to move are actually not in the list. Florida for instance is not even in the top ten places to move to but is in the top 20. In 14th place is Broward County (Fort Lauderdale) and in 17th place is Miami County (Miami).

Top 10 Counties households are moving to are:

Los Angeles County, CA (Los Angeles)
Cook County, IL (Chicago)
Harris County, TX (Huston)
New York County, NY (Manhattan)
San Diego County, CA (San Diego)
Maricopa County, AZ (Phoenix)
Dallas County, TX (Dallas–Fort Worth–Arlington)
Orange County, CA (Santa Ana)
Riverside County, CA (Riverside)
Kings County, NY (Brooklyn)

Top ten Counties households are moving away from are:

Los Angeles County, CA (Los Angeles)
Cook County, IL (Chicago)
Harris County, TX (Huston)
New York County, NY (Manhattan)
Maricopa County, AZ (Phoenix)
Dallas County, TX (Dallas–Fort Worth–Arlington)
San Diego County, CA (San Diego)
Kings County, NY (Brooklyn)
Orange County, CA (Santa Ana)
Queens Count, NY (Queens)

buying, commitment, Communication, education, Inspiration, planning, Team work, tips

CASH BUYERS SQUEEZING YOU OUT OF THE MARKET?

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squeeezingSome areas of the US have become a hot market. Even when you are pre-qualified for your mortgage, and have a 5 – 10% down payment ready to go, you may still come up short when you compete with cash buyers. Based on the National Association of Realtors’ Profile of Home Buyers and Sellers 2013 over 88% of home buyers are financing their home purchase and still many of them are getting priced out of the market due to hard cash buyers who do not need anything but a few days to close the deal.

Keep in mind most cash buyers are part of an investment group or company that has bigger pockets that can support a higher offer than what you might be able to afford. Here are some tips on how to outsmart a cash buyer especially when it comes to you wanting your dream home in an area where there is a huge influx of cash buyers pushing other buyers out of the market:

When you are making an offer on a property make sure you have a nice size down payment. Speak with your lender to find out how much they recommend or are requiring. Some might ask for as little as 5% and others might even ask for up to 10% to 20%.

The bottom line for the seller is what they will walk away with at the closing table. When you ask for a lot of buyer incentives the seller’s bottom line will be affected and they may not take your offer.  Secondly, they are looking at time. How soon the deal can be closed. DO you have another home to sell? The sooner the deal can be closed the better for the seller in many cases.

When you like the area, but you still have not been able to compete with the cash buyers who buy every ready to move in home they can get their fingers on, you might consider buying a fixer upper. In many cases a fixer upper, even in a hot area, will be less and when your mortgage qualification is for more than the asking price of the home, you might speak with your lender and find out if there is a chance that you could start with a construction loan, fix up the property, and then switch the construction loan to a mortgage.

When you are looking for advice or help with your real estate needs feel free to contact us.