Archive for January, 2013

Since 1997 FSBO.com first in real estate

Thursday, January 31st, 2013

Since 1997 FSBO.com has been a leading Internet company that offers ‘For Sale By Owner’ real estate sellers professional tools to market their property. With 90% of all buyers searching the Internet, FSBO.com has been there since 1997. Buyers search is free and unlimited. Seller tools are available and the seller controls all information. They add unlimited photos to showcase their property. These photos can be rearranged, added to, edited or deleted by the seller at any time. Sellers receive a professional, custom made, metal yard sign for their yard. Sign riders are available, such as; Open House, Appointment Only, Pool/Spa, directional arrows, Acres, etc. Supplies and books on how to sell without an agent are available. Brochure holder and flyers are available. The seller customizes the information on the flyer and can print out color brochures at any time. Sellers can add a Virtual Tour or Video to their property listing. With so many ’smart phones’ out there, we are seeing a large number of videos placed with property listings. Once again, the seller takes their own video, does there own editing and they upload. The Seller is in complete control. We encourage that.

Additional benefits, all listings are for one year, you can edit or delete at anytime. Sellers can also publish their telephone number or they can hide it. Seller email address is used, but not shown. Buyers contact the seller direct via email, but they never see the email address of the seller. Only when the seller responds does the buyer have it. All properties are mapped. In case the map of your property is not exact, the seller can log in to their account and adjust the map. Unlimited text: the seller can add an unlimited amount of words to describe their property.

There you go. Unlimited photos, unlimited text, professional yard sign and professional Internet presentation. And at no time will you see distracting pop up or scrolling advertisements. We want the buyers to concentrate on the information provided by the seller.

Short sale contract now in the eighth month

Tuesday, January 29th, 2013

I have been ready to close since the contract was accepted on May 3, 2012. The bank pre-approved the property for a ’short sale‘ and the owner moved out. Some interesting things have happened along the way. When the original closing date came and went, the bank said they decided the price wasn’t high enough. They wanted $3000 more. So, a new contract was written up with a new price and new closing date, then it was sent in and accepted.

A few months passed and it had been awhile since I visited the property. I went and checked it out. There were a few items missing, first the AC unit in the back yard (see photo #1) was gone. In the garage, the top of the furnace was taken (I believe this is called the condenser), see photo #2. Next, the property is a perfect example of what happens to a vacant property, it deteriorates. The longer it sits the worse things look. Everything seemed dusty with cob webs everywhere. The counter tops and appliances appeared worn down. Nothing looked good.

The only thing that was positive was that everything in the neighborhood has sold. The most recent at higher prices. I am still ready to close, but they need to hurry up. To continue, the bank has said they would put in a new AC unit and condenser (that was three months ago) and they have not done this yet. Today, there was some activity. They told us we could close on April 25, 2013 and to write up an addendum to the contract to stipulate that.

Also, they wanted (for the third time) a proof of funds letter. This is a letter from my bank proving I have the money needed to close. It just makes you wonder, do they really want to close or are they just wasting everybody time. The average person that sells a property or has a lease expiring, they know the exact date they must move. There is no way for them to think about buying a short sale property. That only leaves the investor who can wait it out. I’m still waiting.

Photo #1

Shortsale - Stolen A/C Unit

Photo #2

Short Sale - Condenser

FSBO.com says ‘Keep it simple” KISS

Saturday, January 26th, 2013

Whether buying or selling, keep it simple and your transaction will run smoother. Keep it simple …. (KISS). When I bought my first house with a lawn, I asked my father for advice on which lawn mower to buy. He was quick to respond: “get the one with the least amount of moving parts. The more parts, the more likely something will break.” The Apple iPhone has become the most widely owned device in the shortest period of time in the history of mankind. Why? Because it is simple to to use. At three years old my granddaughter was able to navigate the photo section to view family videos. Now, at five years old she can take her own videos, search, add apps, and answer the phone. Here is a message to those trying to find answers:

1. Congress: trying to lower the unemployment rate, the yearly deficit and the national debt. You are trying to get more people employed to solve these problems, well, it is businesses that hire. They have been telling you for years that distracting regulations, complicated taxation, and the unknowns of future laws and litigation detract from using company resources to expand and hire. More expansion and hiring means more profit which leads to more revenues for the government. Listen, act and KISS!

2. Google: you want more businesses to use Pay Per Click, which is your main source of income. Well, they would, except they are using their resources to pay SEO companies and programmers to get ranked on the organic search. Unfortunately, Google changes the algorithms 200 times each year so nobody knows what strategy to use. It’s confusing, time consuming and money wasted to try to keep up. The message to you is: KISS

3. Manufacturers: you want to sell more products, well, have you ever compared today’s owners manual to the ones 30 years ago. Why do I need a degree in engineering to change the oil in my car, figure out whether I want crushed or cubed ice, make a cup of coffee, turn on my TV, run the dishwasher, etc. My message is KISS

4. Government: you want people to buy houses. Have you closed on a house using a mortgage recently. The pile of papers you sign today compared to 30 years ago, well, it’s 10 times the amount. How intimidating. It makes you want to just stay put and not buy another. Message to Federal, State and Local Governments: KISS
Apple got it right, why can’t everyone?

FSBO buyers need to know

Thursday, January 24th, 2013

Buying direct from an owner takes knowledge and can save you thousands of dollars. Here are some things to know:

1. Mortgage company. Your mortgage person does this for a living and knows many things. They can guide you through the entire process. First, the seller will not take you serious unless you have been pre-qualified and have a letter from the mortgage company. Second, they inform you as to local laws/requirements to buying property. Items, such as; home inspections, survey, title insurance, attorney, closing process, etc. Lastly, they usually will offer names of reputable inspectors, appraisers, contractors, insurance agents, etc.
Remember, the mortgage company is putting up more money then you, so they will make sure the property is worth it.

2. Searching for property. For over five years now, the statistic you keep hearing is that over 90% of all buyers start their search on the Internet. Whether by owner or by agent, everyone advertises properties for sale on the Internet. Additional information on the Internet is: school rankings, city information, property assessments & taxes, other properties sold in the area, etc.

3. Other items you will want. Home Inspection by a professional familiar with the area, Home Warranty, Home Owner Association, Insurance policy, Title Insurance, etc can all be found from either the mortgage person or the Internet.

In the end, whether you use an agent or search on your own, it’s the mortgage company and Internet that will give you the same information.

Closing statement offers Consumer Protection

Tuesday, January 22nd, 2013

At closing, all parties are required to sign the settlement statement,  referred to as the HUD-1, which details charges and adjustments to all parties. Also, known as the closing statement, the HUD-1 is required under Section 4 of RESPA and Regulation X of the Department of Housing and Urban Development. Since 2010, the HUD-1 settlement statement also contains what is referred to as a Good Faith Estimate or GFE. This additional set of figures specifies estimated settlement figures provided by the lender upon application of the loan. The FDIC has additional requirements, such as; charges paid outside of closing must be added to the HUD-1. Buyers are allowed one day prior to closing to review all information on the HUD-1. This standardized form is very helpful to those moving to different states, where real estate laws may differ then what you are used to. But, at closing the HUD-1 form will look the same.  Here is a blank copy of the HUD-1 for you to review.

Why mortgage rates are going up in 2013?

Thursday, January 17th, 2013

HOW: In the old days, your local bank executives would have a meeting once a week and at that meeting set their interest rates for the week. Then for the next seven days the bank personnel could quote to you the exact rate you would get. Once you closed on your mortgage the bank would hold the note until you paid it off. This all changed 20 years ago with Wall Street, FNMA and FHA getting involved. (Understand, that when the value of the bond/mortgage goes up the interest rate goes down) Since then, mortgage rates change minute by minute as traders place their bets. Do you remember the last time you met with a bank or mortgage broker, when asked what the current rate is they would say: “just a minute, let me make a call”. They would call their department that deals directly with the bond/mortgage markets.

WHAT: Ok, now that you understand how the interest rates are set, let’s discuss what moves them. It’s supply/demand economics. The more buyers of bonds/mortgages, the value goes up and the interest rate goes down. The more sellers there are, the price goes down and rates go up. Here are the five main players that have pushed up the values which has dropped the interest rate:

1. Domestic Investors: As baby boomers get closer to retirement age, they slowly take money out of the stock market and move their money into Fixed income securities. The largest fund is PIMCO

2. Federal Reserve: in an effort to reduce interest rates the Federal Reserve has purchased over $3 Trillion of bonds over the past four years

3. European Investors: For the past two years these investors have been purchasing US bonds for safety because fear of the European economy/Euro Dollar declining. Last summer we saw a huge inflow for them.

4. Professional Traders: these traders speculate on the direction of the investment. Since the value of bonds have been going up, they continue to buy, which helps push up even higher.

5. China/Japan: each country currently own over $1 Trillion of US bonds.

WHY: why this is changing. Baby boomers not happy with low returns are moving to other investments (real estate), The Federal Reserve now has dissenters concerned they are causing a ‘bond bubble’, potential inflation and they will become net sellers starting next year. European investors are watching the slow improvement in their economy, Greece, etc. and they are now net sellers.  China/Japan have slowed down their pace of buying because of their own economic problems. Traders are not waiting until next year to become sellers. Their job is to stay ahead of the curve and anticipate the trend.

FSBO tips to get your home ready to sell

Monday, January 14th, 2013

Anticipation is the key word. Meaning: ‘the act of looking forward’. Selling your property this spring means getting it ready now through anticipation. You need to anticipate what the buyer will think and do. Remember the buyer is looking for reasons not to buy your house, so get it ready and minimize the buyers concerns. You remember being a buyer when you bought your current home. How many did you look at? You probably drove around areas you liked, looked in the local classifieds, researched on the internet, talked to friends/family/co-workers, etc. Now is the time to use that experience plus the following FSBO tips:

1. Prepare the exterior: start by taking a photo of your house from the road. That is the first impression the buyer will have. Take a good look. Can you see the house or do you mostly see trees and bushes? Time to do major trimming. After trimming, go take another photo and what do you see? Are all gutters, shutters, trim, screen doors, etc attached and looking good. Or do they need repair, paint or replacement. After those improvements, take another photo from the road. Once you are satisfied, walk from the road up the driveway to the walkway and up the steps to the front door. Do you see any cracks or broken concrete? You need to repair. Finally, the buyer will appreciate a freshly painted front door and door bell that works. Once all is completed, take the main photo of your property that you will use in your marketing. Always take the main photo from the corner of your property away from the garage. Nothing worse then looking to buy your next dream house and all you see is two car garage door.

2. Prepare the interior: First thing is start packing. You plan to sell you property and move? Well, start packing up right now. This may sound strange, but you need to pack up all items that are going with you and you can live without for a few months during this process. This is the hardest thing to do, but here are the reasons. 1. Your personal items such as; family photos, decorations, collections, excess appliances, excess furniture/lamps/chairs, etc are distracting to the buyers as they look around. Do you want them to concentrate on your family photos and furniture or have them visualize their family photos and furniture in each room? 2. Removing these items make the room look bigger, thus the perception of greater value 3. This eliminates the buyers seeing something he likes and puts it in the offer to purchase, things like an expensive rug, custom drapes, pool table, patio furniture, etc. Also, if you plan to take the dining room chandelier, a special bathroom mirror, etc. you need to replace them now, so the buyer see exactly what they are getting. Once you have packed up/minimized items in each room, just like the exterior start taking pictures. Study those photos as this is what the buyers will see. Does any room need to be repainted, carpet replace, or light fixture repaired? Do it now. Nothing worse then walking around with a potential buyer and the seller telling them, don’t worry I plan to fix that, replace this, repaint over there, etc. Do it before the buyer gets that impression fixed in their brain. A Quick Tip for the kitchen: new cabinet knobs, new curtains/blinds, or a fresh coat of neutral paint

3. Prepare mentally: Your goal is to sell your real estate to someone else. It is very hard to do, but you cannot be emotional. You bought a home, now you are selling a house. It will be someone else’s home.

4. Prepare your marketing: 1. Signage - it has been proven over and over again. The more quality your yard sign the faster you will sell and for a better price. Hand painted signs nailed to a tree by the road tells the buyer there is no pride of ownership. Quality signs come with your FSBO.com Complete Package or you can purchase separately. 2. Brochures - like the sign, good quality colored brochures. 3. Internet: 90% of all buyers now start their search on the Internet. First thing, go to www.Zillow.com, claim your house, mark it ‘for sale’ and correct all incorrect information. Next choose which websites to advertise. There a plenty to pick from, some free like Craiglist.com and with that charge, but offer unlimited photos, video upload, better display, search, service and longer time period, such as: FSBO.com. 4. Word of mouth: don’t be shy about your property for sale. Neighbors, friends, relative some times know people that are looking in your area.

5. Pricing: Buyers may go to Zillow.com or the county tax assessor to get an estimate and see what you paid. You need to defend the price you are asking and you need to prove the value based on recent sales in the area. While foreclosed properties have hurt in this area, bank appraisers usually don’t take them into consideration. A recent appraisal is very helpful

6. Contracts, escrow and closing: First thing is to work backwards. In the end you will be sitting at a closing table with an attorney or title company. Find one now so you know who will handle the following: 1. title search/insurance 2. hold the escrow deposit 3. provide form contracts to use 4. HUD1 closing statement as required by law. This person/company wants your business so they are usually very friendly and will answer any questions you may have. You can probably start by checking with the closing attorney/title company that handled the closing when you bought the property.

I know books with hundreds of pages have been written on this subject. Hopefully this article will help guide you through the process and you will successfully sell ‘by owner’

Purchasing and Renovating a HUD Home

Tuesday, January 8th, 2013

by Brentt Taylor

What Is a HUD Home?

Finding the right Housing and Urban Development (HUD) home can be a financial windfall for your family. However, you must always be cautious when shopping for deals that seem too good to be true. A “HUD home”is a home that has gone into foreclosure on a Federal Housing Authority (FHA)-insured mortgage. In other words, a “HUD home” is a home that HUD is selling short in order to recover some of its loss.

Naturally, the problem with many of these homes is the tough financial situation owners found themselves in before the foreclosure. This money shortage left little or no funds for routine upkeep or necessary renovations. Consequently, many of these homes require significant upfront repairs in order to qualify for a traditional mortgage.

How a HUD Inspection Differs from a Professional Home Inspection

You cannot count on a “HUD inspection” to uncover the necessary repairs. When a property is foreclosed, HUD performs a cursory Condition of Property report. This is not the same as a thorough inspection, and historically, buyers have been hurt by obvious omissions in these reports. Serious buyers need serious inspectors to determine the relative cost of the property, including necessary repairs.

Professional home inspectors will spend two to three hours examining the property in great detail. Furthermore, buyers are welcome at professional home inspections so that the inspector can explain each flaw. When buyers receive the detailed inspection report — complete with pictures and in-depth analysis of each issue — they are empowered to make an informed decision.

FHA 203(k) Rehabilitation Loan Advantages

Since many HUD homes require renovation before occupancy, FHA offers a special program to address this issue. Traditional mortgages require the property value to reflect the value of the home loan. This means a house in gross disrepair, such as one with extensive termite damage, would not be sufficient collateral for a traditional mortgage. Therefore buyers of “fixer-uppers” often resort to two sets of interim financing before they can qualify for a traditional mortgage: an acquisition loan to purchase the property and a construction loan to cover the renovation project. Both of these loans typically have high interest rates. The FHA 203(k) program eliminates this hardship, offers reasonable interest rates and encourages revitalization of properties that have fallen into disrepair.

FHA 203(k) loans cover both the property and the renovations. The FHA 203(k) program is designed to make HUD houses habitable, so luxury items are not permitted in the renovation. However, as long as habitability issues are addressed properly, the loan can be used in a variety of ways. You can convert a traditional home into a handicap-accessible dwelling, paint rooms, add a deck, attach a garage and even add rooms.

FHA 203(k) loans are limited only to single-family dwellings and multi-family dwellings of two to four units. However, this limitation does allow a buyer to purchase a large structure and divide it into a four-unit dwelling as long as the buyer plans to live in the one of the dwellings. This program, while open to nonprofit groups, is not available for real-estate investors.

So, if you plan on making that HUD home your dream house, go for it. You may find the perfect deal, but do not undertake this project without a competent home inspector at your side. Only then will you know what renovations will likely come with the property. Fortunately, this purchase and renovation doesn’t have to cost more than necessary. The FHA 230(k) program opens up possibilities and is worth investigating.

Fiscal Cliff victory for housing

Thursday, January 3rd, 2013

With the ‘Fiscal Cliff’ legislation signed into law, housing will benefit:

1. Extends 2007 tax break for homeowners whose debt is forgiven by lenders, ie; short sale

2. Mortgage interest deductions still in place

3. Borrowers with mortgage insurance can deduct their premiums

More big reasons to buy that next house!!

FSBO.com reiterates: Interest Rates bottomed

Wednesday, January 2nd, 2013

In this blog on October 27, 2011, FSBO.com predicted that mortgage rates had bottomed. For the past 15 months these rates have moved up slightly, only to fall back to the October lows. Anyone with a job and good credit has had the opportunity to take advantage of this. Now, with the US, Europe and Asia economies all improving, central bankers around the world will slow down on their stimulus. Banks have been waiting for this moment in time to increase the rates they charge. I predict mortgage rates will be 50% higher in one year from today, from 3.5% to 5.25% on a 30 yr mortgage. Also, with the low inventories going into spring, you will see higher sales prices. It’s not too late, but you better move fast if you are planning to buy.