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Real Esate Blog

FORCLOSURE VICTIMS, GOOD FOR RENTERS ??

May 20th, 2009 12:45 AM

If you are like me and have rental properties the question arises "what to do with people who have lost their home to foreclosure?" Personally, I believe this gives us landlords a good market for our rental properties. There are many people who had homes and lost them to foreclosure and now need a place to live. Since their credit is severely damaged for several years at best, I think this is a good opportunity for us landlords to get a better class of renters. If you figure these people, at one time qualified for home ownership, I would think "most" of them would be good candidates for renters, at least for a few years before they can again be homeowners. All I would want to be sure of, is their job is secure and the rental price well under what they were trying to pay for house payments. "Most" should be able to make consistant rental payments of up to, say 70% of their previous house payment. I probably would not go over 70% unless there were other considerations, but if they went into foreclosure trying to make $1500 mo. house payments, I would rent them a home for $1000 and feel pretty comfortable. If we landlords only look at credit scores, I think we may miss a very good opportunity, since the damage done to a credit score by a foreclosure is so great. Look a little deeper and you just may find a good renter for a number of years.

Posted by Phil Turner on May 20th, 2009 12:45 AMPost a Comment (0)

LET'S TALK "CLOSING COST"

May 27th, 2009 11:30 PM

CLOSING COST, A BIG MYSTERY?

Let's me ATTEMPT to clear up this mystery somewhat. Closing cost are a term you will surely hear when you go to buy a home, yet it is mostly misunderstood. Cost paid at closing by either the buyer or seller are commonly called "closing cost". These include approximately seven groups of cost to be paid by either the buyer or the seller, Here are the seven groups and a simiplified explanation of each and who has to pay each cost.

SALES/BROKERAGE COMMISSIONS: This is a cost the seller must pay because the seller has contracted with a Real Estate broker for assistance in selling the home. This normally runs from 5-7% of the sale price but can vary according to the contract the seller has signed with the listing broker. This is not negotiated by the buyer, it is between the seller and the seller's broker.

ITEMS PAID IN CONNECTION WITH THE LOAN: This is the cost of making the loan to buy the propertyand is charged by the lender. This is a "true" portion of closing cost and, believe it or not can be negotiated between the lender and the borrower, thoiugh this is rarely done. Most buyers simply accept what the lender offers. These cost consist of several "fees" the lender charges and is mostly "profit" for the lender to initiate the loan. This can consist of some, or all, the following fees: Loan Origination Fee, Loan Discount Fee, Appraisal Fee, Credit report, Inspection Fee, Mortgage Insurance Application Fee, Undrwriting Fee, Document Preparation Fee, plus whatever new ones the lender can add to increase his profit. The buyer is responsible for these fees but the seller is allowed to contribute to these cost.

ITEMS REQUIRED BY LENDER TO BE PAID IN ADVANCE: These are simple and usually consist of three items. Interest from date of closing to the first of the following month, Mortgage Insurance Premium, Hazard Insurance Premium (better know as Home Owners insurance). Once again these cost are the responsibility of the buyer but the seller is allowed to contribute to these cost (excluding the interest).

RESERVES DEPOSITED WITH THE LENDER: Usually referred to as "prepaids" these cost are the buyers responsibility and normally the lender will not allow the seller to contribute to these cost. These consist of a few months of Home Owners Insurance, Mortgage Insurance, Property taxes, and in some cases Annual Assessment ( for condo and HOA fees). If the buyer is having to pay any of these fees into escrow with the lender they are included here. For the lenders protection, the lender wants to be sure when the Property Taxes, Home Owners Insurance, and Mortgage Insurance come due they have enough of the buyers cash on deposit to make these payments even if the buyer is behind in the regular mortgage payment. The Goverment controls exactly how much of the buyers money the lender can hold so there is a very complicated formula used to compute this amount. It amounts to an extra 2-3 months of premiums for these items.

TITLE CHARGES: These consist of as many as 10 or so, charges plus any the lender can get away with adding. Basically these assure the lender and the buyer that the property has a clear title so ownership is not in dispute. These fees include Title Examination, Title Insurance, Attorney Fees, Tax search, Notary Fees, plus the lender may add Document Preparation, Courier Fee, etc. These are the responsibility of the buyer but the seller is allowed to contribute.

RECORDING AND TRANSFER CHARGES: These are somewhat smaller fees charged by the state or county for taxes, recording the sale and new title. Parts of these fees are the responsibility of the seller and parts are the responsibility of the buyer. The seller must pay the transfer tax, and the mortgage release fee. The buyer is responsible for the recording fee and mortgage fee but the seller is allowed to contribute to the buyers fees.

ASSITIONAL SETTLEMENT CHARGES: This is a coverall for anything not included in the other groups and may include payments to a pest control company for a termite letter, charges for a survey if required, and the lender will usually add charges for "post-closing fee", recording/processing fee, etc. These can be the resonsibilty of either the seller or buyer depending on who incurred the charges. If any are the responsibilty of the buyer then the seller is allowed to contributre.

WOW, this is really a mess and very hard to understand, but you can blame the good ole US goverment for the mess. It is intended to fully inform both the buyer and the seller of all the cost involved in the transaction. And you know, if congress gets involved, it is going to be confusing even with very best intent. Hope this helps you have some understanding of the "closing cost" on a real estate sale.

Just as a point of interest, "closing cost" excluding the real estate commissiond will usually run around 3% ($3000) of the sale price on a home selling for $100,000. The cost go up numerically with the cost of the home but because some fees remain the same for any priced home, then the higher priced the home, the lower the cost will be on a percentage basis. In other word a $200,000 home would not cost $6000 in closing but closer to $5500, etc.

Posted by Phil Turner on May 27th, 2009 11:30 PMPost a Comment (0)

TRULY "FREE" CREDIT REPORT

May 24th, 2009 11:46 PM

GA RESIDENTS GET FREE CREDIT REPORT

As a resident of Georgia you are entitled to truly "free" credit report from all three agencies. Equifax, Experian, and Trans Union all will give you a free summary credit report just for asking. Georgia law makes this possible so get yours. See what is on your report and immediately contest any inaccurate entries. You can get these reports by going to each individual web site or easier yet, go to https://annualcreditreport.com and see all three in one place. It is very important for you to see what is on your report before making an application for a mortgage so any mistakes can be corrected or dispute incorrect information contained in these reports. This summary report will not contain your credit scores but does have all the info used to arrive at your credit score. Why not do it today, it's "FREE".

Posted by Phil Turner on May 24th, 2009 11:46 PMPost a Comment (0)

NEGOTIATIONS!! IMPORTANT!!!

May 16th, 2009 1:59 AM

Just how important is the ability to negotiate when you are representing a client in a real estate transaction? Well, do you want to get the very best price on/for you home? Are you the person who walks into a car dealership and pays the sticker price for your new car because the salesman is "so nice"? Car dealers love these people and laugh all the way to the bank. If you have more money that sense you can get away with this kind of behavior. But if you are like, I suspect, most of us are, you want the most you can get for the least amount of money. I ceratinly do! Then the ability to negotiate is uptmost importance. And negotiation is much more than dickering back and forth on price. To be a really good negotiator takes, not only inate ability but years of learning. If you cannot "read" people you have lost to begin with, and that is the part that takes years of face to face negotiaton to learn and get good at. I happen to be very good at it and it came with over 40 years of learning. First from my father, who was in sales most of his 40 yrs of work. As a young child I watched him bargain for every car we owned, and it amazed me how many times he got his price because he walked away from the deal that was being offered. Many times the salesman chased him to the car to catch him before he left and gave him his price. Then I spent all my adult life in sales of one kind or another. With this as a firm footing. They say practice makes perfect and I don't think I have reached perfection but I work at a very high level. I have even taught classes in a real estate license school to other agents on how to negotiate. If you are a buyer or a seller, let me show you how much I have learned and save you some big bucks in the process.

Posted by Phil Turner on May 16th, 2009 1:59 AMPost a Comment (0)

WHERE TO FIND GOV HOMES FOR SALE

May 13th, 2009 12:58 AM

Today there seems to be much interest in goverment foreclosed homes, be it HUD or VA. A lot of people are ending up on my web-site because they are referred here by Google, MSN, Yahoo etc. searching for this info. There are a number of sites that provide this info so I'm going to give you the sites that I use when researching goverment foreclosures. You will not be able to bid on these home because it is limited to only a group of real estate brokers like myself. But you can see what is available. The site I use most is: http://www.homesales.gov/homesales/mainAction.do?FormAction=GetCounties&state=GA&stateName=Georgia The other site I use is: http://www.realtytrac.com/states/Georgia.html Both of these site are good for certain uses. Realtytrac also includes homes going up for sale on the court house steps. This can be misleading since many of these are brought up to date by the homeowner and never are foreclosed. But it is interesting to look through all this info. Be my guest and when you find a proeprty you are interested in, be sure to call me for expert assistance.

Posted by Phil Turner on May 13th, 2009 12:58 AMPost a Comment (0)

HOME SALES...UP, DOWN, OR SIDEWAYS

May 9th, 2009 12:01 AM

With all the data coming out of Washington it is hard to see what is really happening in the housing market. It seems the way they record home sales is by dollar volume, not units sold, which makes it appear home sales are still slowing since the home prices are about 18% lower than '08. In reality the number of homes being sold is up nicely from '08, it is just that they are selling for much lower prices than '08. Confusing, isn't it... In the most distressed markets, California, Arizona and Nevada, the number of home sales are showing very large increases, some over 100%. With this "boom" in sales the inventory is beginning to come down and that should lead to somewhat higher prices in the future. In my own business I am selling more homes than last year, just at lower prices. Foreclosed homes are leading the parade and resales have not gotten on board as yet. But, If the supply of foreclosed properties drops, then resales should get better. Just waiting to see that happen. Maybe by next year at least.

Posted by Phil Turner on May 9th, 2009 12:01 AMPost a Comment (0)

FIXED RATE MORTGAGES FALL BELOW ARM's

May 5th, 2009 4:35 PM

Wow, I cannot remember a time when fixed rate (30 or 15 yrs) were actually below ARM's (Adjustable Rate Mortgages). Why anyone would take out an ARM is beyond me. In "Normal" times you could save on the monthly payment by using an ARM, not so any more. Fixed rates are around 4.48-4.78 (15 yr-30yr) while ARM's are around 4.85. Now, if we can just get by this "recession" and get homes selling again, we can all rejoice!

Posted by Phil Turner on May 5th, 2009 4:35 PMPost a Comment (0)

MORE "MESS" COMING ON THE TOXIC ASSET FRONT???

May 2nd, 2009 12:18 AM

Just when we thought it couldn't get worse, a new devil is popping his head up according to some. It seems that in bundling, derivative, packaging of these mortgage into toxic assets, many details were not taken care of. Such as recording the new owner, or even who the current owner is. Some homeowners facing foreclosure are finding no one even knows, or can prove, who owns the mortgage so they cannot foreclose if fought by the homeowner. WOW... what a mess we have gotten ourselves into. If the note holder cannot prove his ownership of the note through properly recorded records, they cannot force foreclosure and the homeowner may get ownership of the property without even paying the note, lol. Remember, to be legal, all transactions must be recorded properly and in this messy environment this was not always done. Many judges, nationwide, have thrown out these foreclosure because the lender could not prove legal ownership of the note. Amazing...... to much buying and selling has complicated the process and who knows if, or when, it can be straightened out!!

Posted by Phil Turner on May 2nd, 2009 12:18 AMPost a Comment (0)