Sandy Noll… Real Estate & More

It wasn't THAT long ago that we Baby Boomers worried a lot about our kids.

You know, those irrepressible Generation Y kids who were on the Internet at age 4 and who grew up clicking (my son says I grew up turning dials and that is why his generation is superior different).

Sitting on our own fat bubble- enhanced, low taxed properties, we watched prices spiral out of control here in the San Francisco Bay Area. We believed our children would either:

1. Never be able to afford a house
   
2. Move away forever
3. Move back in with us (eek!) 

But post meltdown, all of that has changed. And in the wake of economic disaster lies a once in a lifetime opportunity to get junior into his very own house or condo.

This is the year to help your kid become a first time buyer. You snooze, you lose.

No, I cannot promise son will become a handyman or daughter will turn into Martha Stewart. But I can promise you that everyone in the family will look back someday (sooner than you think) and thank their lucky stars you took advantage of a 24 karat golden real estate opportunity to give your child financial stability.

Why this year? Here are 3 reasons that point directly to the stars being lined up perfectly:

1. Cheap properties (prices being driven down by foreclosures)
2. Low fixed rates on old fashioned 30 year mortgages
   
3. FHA financing finally has limits high enough to buy in California

As if that isn't ENOUGH, here is your amazing limited time BONUS OFFER: First Time Homebuyer Tax Credit of $8000 is good through the end of the year.

 

The strategy:

1. GIFT your child the down minimum payment (3.5% of selling price)
2. ASK the seller to pay the closing costs in your offer, so your kid needs NO cash at all
   
3. SNAG a cheap property in the best location your kid can afford

Be prepared for this:

1. MULTIPLE OFFERS on lender foreclosed properties for sale
2. SELLERS insisting on an approval with a LENDER (not just a letter from the mortgage person)
3. A LONGER time line than you are expecting

10 things not to worry about:

1. Rates will go lower. FHA loans have the ability to be easily re-written if rates drop (streamline refinance) 
2. Real estate will be cheaper. So what? Think long term.
3. Your kid isn't "ready". Most first time buyers do not have the perspective to understand the benefit of the tax credit, or the silver lining of economic downturns. Come to think of it, you probably weren't "ready" when he was born.
4. Going on the loan with your kid. If your kid has no job now, or just can't afford to buy, you can co-sign.
5. Finding the "perfect" house/condo. It is a starter house, for crying out loud. Do not expect lender foreclosures to be pretty
6. FHA closing costs are "too high". Yep, FHA will have slightly higher closing costs than conventional. Seller may not pay closing costs. You can gift your kid closing costs, too.
7. What if my kid loses his job?  "What if's" are the biggest reason for missed opportunities!
   
8. The real estate market is just too confusing! That is why you should find a great real estate agent
9. Getting a loan is a big hassle! Get preapproved first with a great mortgage person
   
10. Where will I get the cash to help my kid? How about an equity line or retirement account? Maybe Grandma has the money?

Get your kid set and maybe you could move in with him someday. (double eek!)

Maybe not.

 

 

Written by Janet Guilbault, Mortgage Banker/Broker Based Out of the San Francisco Bay Area

 

 

 With all the posts out there about how now is the best time in history to run out and buy a home, I thought it only fair to show you the reasons that you should not do so. The last thing this economy needs is for consumers to start spending money, that would actually cause the great deals to go away. Mainly due to the fact that it would cause the economy and the real estate market to recover, and at this point that's the last thing we need.

10-  Rent is fun to pay. I mean it's not at all like having to pay your own mortgage, why do that when you can pay a mortgage for someone else. If you went out and bought a home, there would be one less investor out there getting a free house with your money.

9- The amount of homes for sale on the market. There is no need to running out there when you have a ton of homes for sale at your disposal. You should certainly wait for the numbers to dwindle so you will have less of a choice you decide to buy. This will keep you from having to be so picky.

8- The great deals will be the first to go. This will be your indicator that you are getting close to time to start looking. All the good homes will be taken and then you can go sift through the left overs for what you can salvage.

7- Low Interest rates. Low interest rates will cause your mortgage payments to be lower, and this may make you feel like you are not doing your fair share. You should definitely wait around for those rates to rise so you can make a higher monthly payment. Then you won't have to deal with the guilt of saving money.

6- The price of homes for sale. Currently many homes for sale are on the market at very competitive lower prices. If you can manage to hang in there a little longer without buying a home, then you can catch market during or after a recovery. This means that you will get to pay more for the home than you would today.

5- With today's rates and prices, mortgages on many homes for sale are actually cheaper than rent on the same homes. Again this would possibly save you money, and that's not what you want to do. You need to wait for the prices to rise so you're not getting as good of a deal.

4- A 10% of the sales price tax credit up to $8,000. If you were to buy a home now,and you are a first time home buyer, then you would receive this tax credit. If you can hold out until next year, then you will be able to avoid this tax credit all together. This will save you the aggravation of trying to decide what to do with the extra money on next year's tax return.

3-Builder incentives. At present, in addition to the competitive prices, many builders are offering other incentives on new homes. Incentives like a percentage of of the home for sale depending on your employment and reduced pricing on upgrades. Some are even offering free upgrades and tossing in little extras that they normally do not offer in order to sweeten the pot. This would mean that you could get a great deal on a brand new home in your area, and that's the last thing you want. Wait for these deals to be snatched up other buyers before you even consider looking for your new home.

2- Lack of competition for you. Right now with many would be buyers sitting on the fence trying to make a decision, you would have your pick of the litter as far as the homes currently available are concerned. You need to wait until many more buyers are on the search, that way you can possibly end up in multiple offer situations and have to fight another buyer over the home you really want.

1- The pride of home ownership. There is no reason to come home to a home that actually belongs to you. Why not constantly come home to a house that you are buying for someone else.

 

 I hope that in some way this has helped anyone reading to figure out why you should stay on that fence. There are really too many great deals and incentives out there to subject yourself to making a decision as to which one you want. So hang in there and stay on those sidelines. With a little discipline and a little luck you'll be able to avoid all the great deals that this current market has to offer. Best of luck to you.

 

www.jlboney.com

Every agent who has participated in a short sale transaction knows there may come a moment when the lender announces a reduction in the commission it will approve as a condition of accepting an offer. A great deal of angst circulates around this issue because, despite what the seller agreed to pay in the listing agreement and notwithstanding the advertised SOC, the transaction cannot close without the lender's approval which is often a "take it or leave it" position. The buyer and seller want the transaction to close and agents do not want to be a road block to that outcome. Balanced against this is an agent's and broker's need to earn a reasonable income and justify their own expenses and liability incurred in a transaction. If lenders condition acceptance of short sale terms on agents' willingness to accept a reduced commission, agents really have no power - except to decline to list or show short sale properties in the first place - a tragic result for everyone, including lenders.

The new Fannie Mae policy says the following:

Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers