Positive Real Estate Professionals

I have seen the video below several times and it has always spoken to me the same way. Regardless what is happening on Main Street or Wall Street, if you are in the position to buy, then you are in a position of strength. This is true whether it is the housing market, the auto industry, the boating industry, or maybe the furniture market. However, the real question is how strong is your buyers strength? That is the question that I will try to help you answer in this article.

The first thing that you have to understand is the meaning of “buyers strength.” This is not something that you can look up in a dictionary or in a Wiki somewhere. Buyers strength is simply put, your ability to purchase in today’s market. Whether you have the liquid capital or access through a lender is the first and biggest difference in buyers strength. There are those that have and then there are those that have not but can get. The haves are in the best position of strength because the funds are readily available and the purchase is not contingent on financing. Frankly, there are way fewer of these buyers on today’s market than what I would like to see. My main feeling is that many buyers are waiting to see what is happening on the market. Personally, I think that is a huge mistake. Fence sitting is not the prescribed medicine for the ills in today’s economy. You can read Indecision is the graveyard of good intentions and Did you sit on the fence too long? Interest rates spike! for different points of views on this topic.

Now, let’s get back on track. For all of you buyers out there that do not have the readily available cash to purchase, here is how you can gage your own buyers strength prior to going to a lender. Yesterday I was contacted on one of the other sites that I write for by a fellow blogger. Her and her boyfriend are getting ready to buy a home and they have been looking for a mortgage calculator that would take into account their credit score when helping them calculate the amount that they can borrow. Well, quit looking folks because there is not one out there that will take into account the credit score when it comes to the amount that you can borrow. Credit scores drive the loan to value or how much of the purchase price that you can borrow. It also gives the lender a basic “qualification” point to start with. Also, in some cases, it might determine the amount you can borrow if you are exceeding the conforming loan amounts, but that is a horse of a different color.

When you are looking to qualify for a home, the first things that you want to take into account is how much money you make each month. How long have you been on your current job? And how long you have been in the same industry? Another thing that lenders will look at is how timely you have been paying your rent or mortgage over the last 12 to 24 months, depending on the lender. Also, the lender will take into account how you pay your current trade lines that are reporting on your credit report and how long they have been in existence. Once all of these facts are gathered, this will truly determine your “buyers strength.”

[youtube]http://www.youtube.com/watch?v=rQhhohPfLvg&feature=related[/youtube]

It will not come as a surprise to anyone that banks all over the world have been in severe trouble as the global economic woes impact most segments of the financial industry. I have read numerous articles, and written a few myself, about when the bottom of this crisis would be reached. Back on January 9th, I happily wrote a post entitled Rebounding Markets in which I discussed the flurry of reports on the bottom of the economic markets having been reached.

Today, Wells Fargo released its first quarter numbers. The first quarter profits for Wells Fargo have surpassed all of the most optimistic Wall Street predictions. Wells Fargo’s acquisition of Wachovia last year prompted a loss of over 50% of its profits. In spite of this loss that was directly related to the large stock of delinquent home loans held by Wachovia, the home loan sector of Wells Fargo generated $100 billion worth of closed mortgages in the first quarter. Prompted in part by the lowest interest rates since 1971 (source: Board of Governors of the Federal Reserve System), President Barrack Obama said today that refinances for March rose by 88% and represent 75% of loan applications.

Still think we haven’t reached the bottom?

With all the changes to guidelines in the lending industry that have taken place in the past couple of years it is important for both you and your Realtor to know what type of loan and how much of a loan you have been qualified for. Even if you don’t feel comfortable going to the top of your qualifies loan amount, it is important to know your ceiling. In the following article from Debbie Malone, this excellent Realtor gives her very solid advice drawn from her years of experience as one of the best Realtors in Virginia. I hope you find the article both informative and useful.

<Via Debbie Malone RE/MAX 1st Olympic:

There was big news today out of Denver! It would have normally come from Washington, D.C. but President Obama decided to sign the stimulus bill, called the American Recovery and Reinvestment Act of 2009 in the Mile High City. In the following article Fred Chamberlin examines how this new law may affect homeowners specifically and the real estate industry in general. This is an enormous piece of legislation that will take time to comprehend. The issue now is how can this new law can be effectively used for the benefit of homeowners and the overall economy.

Via Fred Chamberlin of FHA Loans Oregon:

I just received this from the Mortgage Market Guide and it gives a little more information about the First Time Home Buyer Tax Credit included in the Stimulus Bill that was just signed into law. There will be a lot more information coming about what parts of the bill will be the most effective in helping people get back to work and working on the consumer confidence. There will also be more information coming later about plans to help the housing industry with the foreclosure problem.

Economic Stimulus Plan Benefits the Housing and Mortgage Industries

Revised February 17, 2009

Just signed and sealed…a $787 Billion Stimulus Plan made up of tax cuts and spending programs aims at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II.

Home owners and potential homebuyers stand to gain from key provisions in this stimulus plan. Here is what we know as of today…

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Tax Credit for Homebuyers

First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

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Additional Housing-Related Provisions

Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8 ) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

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More Help for Homeowners in the Future

Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

The Economic Stimulus Plan is huge, and impacts a number of industries. I’ve highlighted some of the major provisions that may impact you now and in the future.

As always, if you have any questions or would like to discuss how this may specifically impact you, I’d be happy to sit down with you. Just call or email me to set up an appointment.

When you work with a professional they listen to your needs and hopes; they talk to you in a way that you can understand even if it is something you know little about. In short the same qualities that many of us look for in friends are the very same qualities we look for in professionals. Do you have that level of comfort and understanding with the professionals in your life? In the following article, Danny Thornton explores the importance of a good working relationship with your real estate industry professionals.

Via Danny Thornton:

When I have talked to people over the last 6 to 8 months, it seems one of their biggest concerns is whether or not their loan officers are giving them the best loan for them. Too many times have I witness loan officers getting on a kick of selling just FHA loans and frankly ignoring USDA, VA, or even conventional loans. The problem with this is that they might not be getting you, the consumer, the best loan for your circumstances.
Let me give you an example of what I mean. A few months back I had a customer call me distraught. The lender that they had contacted previously had qualified them on a conventional loan and the customer had to bring almost $20,000 to the table. The down payment was 10%. After asking a few questions, I found out that the customer was a veteran. Upon realizing this, I immediately thought of the VA loan. In this case, he could get in the home at 100% financing, pay his closing cost, and still have money in the bank for a rainy day. With the conventional loan, he would have been tapped out in the bank.
After digging a little deeper, I realized that this mishap was not the fault of the loan officer though. When I went to their website, I found out that they were not licensed to sell VA or FHA loans. This is something that is very important to know going in when dealing with a mortgage company. Also, another thing to take into consideration is the fact that just because a lender is licensed FHA or VA, it does not mean that they also carry all the products that either of them has available.

This is by far one of the best articles I have come across in a long time that really spells out the need for buyers to get a pre-qualification letter as a first step in finding the home that fits perfectly for their situation. In today’s market, when gas is expensive, realtor safety is always a concern, and setting realistic expectations for buyers is more important than ever,  it only makes sense to help buyers maximize their home search. Debbie goes into many of the reasons why this is important. Her article is not meant to discourage any qualified buyer. It is I believe meant to help both buyer and realtor to know what type of house they should be looking for. I am sure you will enjoy this article from one of the most successful realtors in Virginia.

Via Debbie Malone RE/MAX 1st Olympic:

Pre-qualification- When you prequalify for a mortgage, the lender calculates the approximate amount you’d be able to borrow, based on your current income and debt.

Simple right?

Then why don’t buyers understanding this is the first step in the home buying process? Not going through the Sunday Real Estate section and picking out pretty houses they want to see. And, why are agents moonlighting as tour directors? I do have better things to do with my time- really, I do. If you’re serious about buying a home get pre-qualified before you start viewing homes. Agents, if you’re opening doors for just anyone you need to stop.

So Deb, tell us how you really feel.

I received another call on one of my foreclosure listings. After answering several questions about the condition and size, I told the caller the usual info: sold as is, bank would not pay closing costs, they require a pre-qual to accompany all offers. The caller told me they had been looking at homes for several months and wanted to see this one. They aren’t working with an agent, great.

I asked which lender had pre-qualified her. “Oh, we haven’t been pre-qualified yet.” Let me understand this, you’ve been looking at homes, with an agent, and no one has pre-qualified you? NO. Well then, how would do you know the loan amount you’ll be approved for without speaking to a lender? “We’ll get pre-qualified before we make an offer. When can we see it?” Hold on…. I need to explain a few things first:

1. I don’t just run over to a listing and open the door for you. I meet with you at the office, get some information and then we set up the showing appointment.
   
2. I don’t show homes without you first meeting with a lender and producing a pre-qualification letter. (Thank you Judi for teaching me that early on in my career.)
   
3. Not keen on that? You are welcome to call any agent you would like. They’ll be able to get you into the home and I hope it works for you.
   

We all know pre-qualification is just the first step in the home buying process. And I’ve had committment from the loan officer only to received a call a week before closing telling me the loan’s been denied in underwriting. But, times aren’t so desperate that you’re going to run me ragged showing you houses you can’t afford. It’s not fair to a seller to set up an appointment and get their hopes up, then show their home to someone who cannot afford to buy it. I don’t work that way. Miffed? I’m sure there’s an agent out there ready to let you in, but it’s not me. Buh-Bye now.

From the Free Dictionary:

Prequalification. When you prequalify for a mortgage, the lender calculates the approximate amount you’d be able to borrow, based on your current income and debt.

Many lenders offer free mortgage calculators — sometimes called prequalification calculators — on their websites to help you estimate how large a mortgage you’d be approved for.

Since you don’t complete a mortgage application or provide financial details, prequalification is not a guarantee, and simply helps you determine how much you should plan to spend on a home. But before you’re approved for a mortgage, you’ll have to go through the mortgage application process, including a credit check, and provide financial documentation.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

When I came across this article by Fred Chamberlin I was stunned to say the least. This article illuminates a path for home ownership for lots of Americans. This means that what Fred discusses is important and different from traditional FHA, VA, and USDA programs because it can be used by investors. That’s right, investors! Do I have your attention now? Then read on…

Via Fred Chamberlin of Eugene Loan Guy:

Foreclosures, how to buy them and maybe most importantly, when. I have been discussing how to use the FHA 203k Streamline as a great way to buy your personal residence and be able to fix it at the same time. Effective today, we have another program to help purchase foreclosures (or REO – Real Estate Owned) properties that are owned by Fannie Mae. This new program is called HomePath. This is an unusual program because it allows not just personal residences, but also second homes and investment properties as part of the program.

So, what is so special about the HomePath program? Well, to start with, it is available up to 95% loan to value on a personal residence, including double wide manufactured home/land properties, with no mortgage insurance. SAY WHAT!!!! Not only that, it is available up to 90% loan to value for investment property and second homes, also with no mortgage insurance. Appraisals are not required. Only those REOs registered with the HomePath program are eligible for the program.

There are currently three homes listed on the website in Eugene, two in Springfield, three in Cottage Grove, three in Creswell, one in Junction City, and one in Veneta. Of those, one of the Springfield properties, two of the Cottage Grove properties, one of the Creswell properties, and the Junction City property show as being under contract. There are six currently listed in Salem, but three of those are under contract. There are 10 listed in Bend with none of them showing as under contract. To find out what properties are available in your area, go to www.homepath.com. There will be a HomePath renovation program available at a later date, but not currently.

This is a very specialized program, with limited properties. However, if you are an investor, where else can you buy a home at 90% loan to value and not pay mortgage insurance? For that matter, where can you buy a home at 90% loan to value as an investment property? As I stated before, I still believe that it is in your best interest to have your own Realtor® representing you in this process. Call me today to get pre-approved to purchase one of these homes. These deals will not last long as investors snap them up.

A couple of days ago Fred Chamberlin wrote an excellent article, Buying Your Home: Do You Want To Buy a Foreclosure? In that article he discussed many of the issues that a prospective home owner might encounter when buying a foreclosure. In this post Fred discusses the importance of having a Realtor® that is knowledgeable and trustworthy to represent your interests.

Via Fred Chamberlin of Eugene Loan Guy:

You are in the market for a new home and you have decided that you want to maximize your investment by buying a foreclosure. You read my last post about some of the problems encountered with a foreclosed property and have gotten yourself set up with a knowledgeable lender and are ready to proceed with the next step in the process. So, let’s talk about the next step: Finding the right Realtor®.

I am not the world’s greatest expert on Realtors®, however I know the ones that I have worked with and understand professional behavior. I know there are Realtors® that can work as the listing agent and the selling agent, but personally, I believe that a buyer should be represented by their own agent and not risk the possible conflict of having a listing agent as your buying agent. The only thing worse, in my opinion, is having your Realtor® also as your loan officer. Now, that I have that out of the way, how do you determine who the right Realtor® is for you? Here are some of my criteria:

1. Find someone that you respect.
2. Find someone that you trust.
3. Find someone that you will listen to and will listen to you.
4. Find someone that you believe.
5. Find a professional.
   

Do they have to be a man? a woman? young? old? in Eugene? in Springfield? The simple answer is, yes. Your Realtor® should be someone that you decide. Ask them questions and develop a rapport. Tell them what you want. Make certain they are familiar with the area you want to live in.

Can I recommend someone to you? Absolutely! There are a number of Realtors® that are linked to my website and I can recommend all of them highly. For specific recommendations, I have specific people in mind.

A good Realtor® will have access to all of the foreclosed properties in the area you are looking in. This Realtor should be able to narrow the choices from what you have shared but often, the property descriptions are not as accurate as they should be, so you might be looking at properties that are not as suitable as others. Trust your Realtor® and keep faith they will find the right place for you.

Here, I want to talk about loyalty. If you are spending time with a Realtor® and they are taking you to houses that are within your parameters, give them your loyalty. That means that if you go to an open house and the Realtor® at the open house asks if you are working with someone, say yes! If your Realtor® is not showing you what you are looking for, doesn’t return your calls or doesn’t seem to care, then find someone that does. Call me; I will set you up with someone that cares.

OK, this is pretty long, so tune in next time to find out what you need to do once you have found that perfect house (well, it will be after repairs). To understand more about the buying phase, read this article from one of my Realtor® partners, Lori Palermo.

In a post by Sandy Noll she not only poses the question to the current homeowner and prospective home buyer, Is now the time to buy or refinance? She also gives you one of the most important tools in helping you to make that decision. More than a traditional mortgage calculator, the link allows you to input different variables like current vs. future home value and different interest rates. Hint to using the tool, the green box in the right hand quadrant it the control for the Sales Price Comparison and the Payment Difference charts. I hope you find this post useful.

Via Sandy Noll: Your Realtor of Choice for King, Snohmish, and Yakima County Washington:

We’ve all heard that this is a GREAT time to buy real estate because interest rates are at historic low rates, but what does that really mean?  And what about those of you that are waiting until the home prices drop just a little bit more to make your move to buy?  And how about those wondering if they should refinance a loan they got a couple years ago?

To help answer all these questions and quite possibly more click on this link www.loancentral.com/SandyNoll to use a really cool interactive tool that just might shed some light on yours or someone else’s situation and help answer the question, “What should I do”.  Oh, you don’t have to register to use the tool either!!

If you have questions or need help interpreting the results after using the tool, feel free to call me and we’ll walk through it!  Also feel free to forward this email to everyone you know so they too can see what interest rates vs lower home prices actually do to payments!!

BE SURE TO CLICK ON THE LINK ABOVE……YOU’LL BE GLAD YOU DID!!  GO AHEAD AND CLICK….YOU KNOW YOU WANT TO!!

With a resounding ring, the new year was ushered in by billions of people all over the world. For some, they were glad to get 2008 behind them. For others, they were glad to get 2009 started. For me, I fall in the second group. I am excited in what I see happening in the housing market here in American. Do I think that it is going to create a wealth of income for fly-by-night professionals as it did in the 90′s? No, not even close, but it will create a steady stream of income to the professionals that get into it for the right reasons.

At this point and time, it is a great time to buy or refinance. Rates are historically low, but if you are a person that likes to play the waiting game, this is truly not a market that you want to be in. It is not stable and the rates do not sit still. What a loan officer might quote you today might be gone tomorrow. It might change for the better and it might change for the worse. It is almost like playing Russian Roulette. Personally, I do not think that it is worth the wait.

If  were in the market to buy or refinance and I get approved, I am jumping in the market. That opportunity might not appear tomorrow or next week. We live in a time and age that we have to be in the now. That means, if you want to take some time to think about it, 24 hours is not on the table any more.

One for the things that readers know about me is I have always been a straight shooter and will continue to do that. I am always going to make it positive but I am not going to sugar coat the truth. If it was ugly, I would tell you it is ugly. Frankly, I can not see half of these things that people talk about. I hear people saying that it is harder to get a loan. Frankly, I cannot see that. If you mean that you can not just call up and tell the lender how much you make and how much is in the bank, then I guess you are right. Those loans are long gone and should have never been so loosely offered.

With that said, as long as you meet the criteria having a job, making money, and paying your bills, then you need to be taking to a competent loan officers. These are the only people that can tell you for sure if you qualify.

As always, if you have questions, do not shy away from asking. I will be brutally honest with you.