Jonathan Osman blogs about a pattern occurring where home buyers have bought into the myth that the only good deals in town are bank-owned foreclosures, which he states, simply isn’t true.

“Having sold more than my fair share of bank owned homes over the last few years, I can personally attest that most buyers have a idealistic vision of their dream foreclosure. The home is in perfect condition (not even a scuff on the wall), all of the appliances are installed, and the home can be purchased for half of the asking price.

As things progress, that same buyer undergoes a reality check when they discover that bank owned homes have lots of deferred maintenance, the appliances are gone, and the bank is holding firm at their market value price.

Many think that auctions are the way to go, rationalizing that the banks are just unloading these properties for pennies on the dollar.

Again, having worked with a client who purchased a bank owned home through a large auction, I can say that the discount was really non-existent given the condition of the home. In fact, the auction pressured the buyer into closing whether he liked the home or not so that he wouldn’t lose his $25,000 in earnest money and up-front fees.

Since foreclosure homes are the latest rage in the market, the banks are able to use the hype to keep prices elevated for a higher return for themselves.”

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REALTOR® Dave Harris shares his Top 8 reasons that now is the best time to consider a move.

 
“1. Prices to buy are incredible

Quite potentially, there hasn’t ever been a better market to buy a home.

It’s doubtful that if in my real estate career, we will see a better buyers market this good again. As an example, in a period of six weeks, I sold four houses that were foreclosures; each of them was purchased for $100k less than the sellers had paid three years ago.

To put that in perspective, my people bought them for about 50 percent of the price from three years prior. 50 percent! Of course every situation is different, but there are truly some great deals out there!

2. Prices may get worse

So what is your plan? Stay for a couple more years and sell when the market ‘turns around?’ Not to be Debbie Downer, but things are going to be this way if not worse for 3-5 years according to most predictions.

As long as people are still out of work, and still getting laid off, we are going to see more foreclosures and more short sales. Buyers pay what the neighborhood homes are selling for.

Meaning if that foreclosure down the street sold for much less than what they paid two years ago, that sale affects the value of your home as well.

Statistics are showing that notices of mortgage defaults are on the rise. Translation is the people who are three months or more late on their mortgage.

3. Historically Low Rates!
Rates are historically low floating around 5 percent for a 30-year FHA fixed rate loan, and they won’t last forever.

Many of the ‘old timers’ in the real estate business will tell horror stories of the day that they started, rates were double digits – P.S. it wasn’t that long ago! Can you imagine?

Once the demand in the market begins to pick up, guess what will happen to the rates? Banks make money on interest rates. There is already much talk that rates are too low now and should be raised.”

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REALTOR® Kharee Shorter shares six easy points to remember when starting a home search.

 

 
“First, determine how much home you can afford. As a rule of thumb (and only a rule of thumb), you can afford to buy a home equal in price to about three times your gross annual income.

More precisely, however, the price you can afford to pay for a home will depend on six factors:

• Your income

• The amount of cash you have available for down payment, closing costs, and cash reserves required by the lender

• Your outstanding debts

• Your credit history

• The type of mortgage you select

• Current interest rates

The process of buying a home is much easier if you start out by getting pre-qualified or even pre-approved with your lender for a home loan. This amount will let you know how much home you can buy, and makes you a more credible buyer.”

A good motto for new home buyers should be “always be prepared” – preparation will make your home purchase run much smoother.

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Am I allowed to call utility companies and ask for the last 12 months of utility bills for a house that I’m considering buying?

            -Brian

Absolutely, I just overheard another agent in my office doing that exact same thing for one of her customers. They may not be able to tell you each month’s bill, but they should be able to share the average for the last 12 months along with the high and low.

-David W. Welch, Real Estate Optimist

David Welch specializes in residential re-sales and new home construction at RE/MAX 2000 Realty in and around Orlando, FL.

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Anthony Gonzalez blogs about the latest program from the Obama administration which sees it as a way to help speed up the process and prevent foreclosures.

 

“The government is trying everything they can to end the mortgage crisis and there is another new program they have devised in hopes of helping the 5 million plus homeowners behind on their mortgages coming in April.

This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.

So far, President Obama’s $75 billion loan modification program has only helped a small amount of those 5 million plus homeowners.

The government acknowledges that more needs to be done and the efforts need to be aggressive. They do not want to see all these people lose their homes.

As of April 5th, homeowners will be encouraged to sell their homes by way of the short sale process. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.

The government wants to streamline and standardize the short sale process to make it much easier on the borrower and much easier on the lender.”

There are high hopes that this program will help end the logjam of homeowners currently trapped in loan modification limbo.

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Last October, a friend of mine refinanced his home that he has lived in for the past 5 years. He went from a 30-year fixed to a 15-year fixed mortgage. Now, he wants to sell the home this summer. Is there a penalty? If so, what is it?

-Naomi

Whether or not there is a pre-payment penalty depends on the Note between your friend (the Mortgagor) and the lender (the Mortgagee). When a mortgage is given on a property, the Note is the actual contract to pay back the loan. In the note (and other closing documents), it should specifically state whether or not there is a pre-payment penalty. I believe that some states actually restrict or even prohibit mortgage pre-payment penalties as they are specifically designed to prevent refinancing, but I am not certain.

In any event, if your friend checks the Note and other closing documents, it should clearly state whether or not there is a pre-payment penalty, and if so, what the penalty is. If he cannot find it, advise him to ask his lender or the settlement agent for a copy.

David Kres is a REALTOR® for Buyers Brokers Only LLC in NE Massachusetts/Southern NH.

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REALTOR.com® took the top spot again as the most visited real estate website during the month of February according to the February 2010 comScore Media Matrix report.

Last Month, Realtor.com attracted more than 6 million unique visitors, followed by its closest competitor Yahoo! Real Estate with 4.6 million unique visitors.

Other sites in the top 10 included MSN Real Estate with 3.6 million unique visitors in February, AOL Real Estate with 3.2 million unique visitors and Rent.com with 2.7 million unique visitors.

When searching for a REALTOR®, what do I look for?

-Donald

If I could nail it down to just a couple of key aspects, I would say integrity and feeling comfortable with them. You really need to feel that you can trust them, and that you will be able to communicate with them effectively.

I sat down with a seller, and he had a book on his dining room table titled “1001 Questions to Ask Your Real Estate Agent.” I looked at him and said, there is no way, I am going to sit here and answer 1001 questions.

I do recommend speaking with two or three agents. That way you can ask them about their experience and how they work. Whether you are a buyer or a seller, it is important to know if they are active in your market. Ask them about the local market, about their company and about them. It is a tough market in a lot of places right now, so don’t be surprised if they have not sold a lot of houses. Find out if they work alone or as part of a team. Find out if they use e-mail, text or a smart phone. If you prefer text, and they “don’t do that” you are going to have difficulty communicating.

As far as finding the three to speak with in the first place, personal referral is best. If you don’t know anyone that has bought or sold recently, try the old stand by– Google. Websites are a great resource. Read their blog. When was the last time they updated their website? Do they have any listings on their site? Where does their site come up in searches? Take a look at their listings on Realtor.com. Best of luck in search for a great Realtor.

David Welch specializes in residential re-sales and new home construction at RE/MAX 2000 Realty in and around Orlando, FL.

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Austin REALTOR®, Joe Cline, blogs that there is a tried and true system for determining the value of a property, including estimating the price per square foot, but it all boils down to location, location, location.

“When shopping for a deal, you will want to break down the purchase price and apply it to a smaller denominator to best compare one property to another. The way to calculate the highest and lowest housing units is to divide the total sale price by the structure’s square footage, thus you will get a price per square foot.

Urban areas in a major metropolis will yield a higher market price per square foot than those urban dwellings in a less densely populated area. New York City, Los Angeles and similar districts have the highest square footage price on their condominiums and single family homes. However, if you wish to have easy access to a major metropolitan area, yet keep your home purchase within budget, the solution is to find a property that is located near the county rail or subway system.

The general rule is that the further the property is located from the city’s financial center, the better the property price will be. In the case of New York residents, its not uncommon for city workers to commute one hour or more on the railway system. This enables the consumer to own a piece of property of a greater size than what would be available at the same price closer to the city, and affords the home buyer more property choices.”

Basing your purchase on not only price, but on individual needs, will result in a satisfied buyer who really gets the best ‘bang for his buck’.

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Carolyn Herrera blogs that many times cash offers or 20-25 percent down- conventional buyers are not always the best buyers for your home.

“Many buyers in this market are first time home buyers just starting out maybe with an FHA loan or VA/CalVet loan. These buyers are also very good and qualified buyers. Many of these buyers are coming in with just enough money for the down payment and need a little help with the closing costs, so they are usually willing to increase the sales price to allow for the help.

If you are the seller, debating whether to take the FHA, VA/Cal Vet over the conventional or cash buyer, ask your agent to have the buyer’s agent personally present the offer. This gives you the opportunity to learn a little more about the buyer you may be selecting to purchase your home. In a multiple offer situation, many buyers’ agents write up cover letters about their buyer; sometimes the buyers themselves write a letter to try and paint a picture of whom they are and why they want to buy your home.

Now I am going to play devil’s advocate: buyers need to be aware that the seller doesn’t have to pay for your closing costs; so if you only have the down payment, you should have a plan B. Know what your options are and have them lined up before you begin writing offers…

Having an honest, open level of communication with your REALTOR® is crucial. Your agent will fight for you and go the extra mile for you if they know exactly where you stand. Listen to your agent, be more aggressive about your offering price, write a letter to the seller to be attached to the offer, ask your agent if they can present the offer personally to the seller on your behalf.

I always ask if I can present my offer directly. Many times I am not given the opportunity, but on the occasions that I am it has always been a win-win situation for all. I am given an opportunity to sell my buyers and their offer to the seller. This could be the deal breaker on whether they might pay the closing costs or not.”

The bottom line is buyers, don’t give up and sellers, have an empathetic ear; after all, we were all first-time home buyers at some point.

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