buyers (37)

Items that Repel Homebuyers

Items that Repel Home Buyers

The seller’s market that was so prevalent a few short years ago seems to have shifted in favor of the home buyer. Thanks to an overall improvement in the economy and home prices that have risen by 10% or more for the past year, buyers are becoming a bit more selective about their purchase. Here are some items that scare buyers off and what you can do to fix it.

Foul Smells

Shocked-Home-Buyer-281x300.jpg?width=281Certain buyers may like fried food or indoor pets, but most people are turned off by unpleasant odors. This is especially true when the odor is noticeable when a person first walks in to the home.

Odors come in all shapes and forms. Various kinds of food, pets, and tobacco can leave behind distinctive smells. It is important to deep clean the home, the carpets and even the ventilation ducts to get rid of the odors.

Paper on the Walls

For 40 to 50 years wallpaper was quite the rage. Unfortunately, those days are gone. Since most people pick out a very particular wallpaper to go along with certain furniture and trim it is highly unlikely that the next person to buy the home will have the exact same taste. It is better to remove or cover up the paper with paint that is in a neutral tone. Wall paper on one accent wall can be a neat feature however. Using paint and stencils might be the best choice because it would be easy to paint over if it is not to the taste of the buyer.


Many sellers fail to realize how important it is to have the home looking as clean as a brand new home. Most buyers do not look past what they initially see in order to understand the potential value of a place. They simply want to walk through and imagine their furniture, heirlooms and personal belongings in various spots in the home. That is tough to do when the sink is full of dirty dishes; the living room is a mess and all the floors need cleaning. Go through every room and thoroughly clean everything.

Sellers Standing Around

The vast majority of buyers prefer to look at a home without the seller present. When a seller is in the home during a showing it presents a bit of awkwardness for the real estate agent and makes the buyer feel pressure. This is easy to remedy: do not be present when the agent shows your home.

Old Items

If the home looks like you stepped back in time 20, or 30 or more years then it will be tough to sell. Old plumbing fixtures and doorknobs that have lost their usefulness scream out “lack of maintenance” and it will make potential buyers wonder if other things in the home are in need of major repair.

Less than the Truth

Thanks to modern technology it is easy to put together a large number of digital pictures and even a video of a home. These items, along with descriptions, need to be as accurate as possible. Putting up a description that omits the fact that a home is mere feet away from a train track or a picture that misleads about the size of a room can turn off not only buyers but agents as well.

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4359195806?profile=originalIn December 2014, national cash sales on single family homes made up for about 35% of the total of all home sales. WOW!!  However, if we turn the clock back a year we find the cash sales in December 2013 made up 38.5% of the share; so why is this figure falling and should we be worried by it? Now, I’m not saying that this # is the best gage of the real estate market, but we definitely should watch it. 

The percentage of cash sales on homes has been declining steadily since January 2013 and every month that follows the figure goes down a little more. Now, December 2014 was the 24th month on the bounce where cash sales – as a percentage of all home sales – were down. 

Usually the drop each month would only be around half a percentage point but because there are seasonal variations, the figures should be taken as a year-on-year representation rather than a month by month one. If you are a real estate agent, you definitely understand that.

So, why are we still seeing a decline in the amount of cash sales. Turn the clock back just a little to January 2011 and you’d be amazed to learn that cash sales made up 46.5% of all home sales. 

It has to be a strong possibility that mortgage lenders were tightening up and not loaning out to any Tom, Dick or Harry and that if you wanted to buy a home, you had to pay up, especially if you were a foreign buyer. 

If we turn the clock back even further to the days before the housing crisis started, you will see cash sale figures of just 25%! Astonishingly low, but consider that these were the days when mortgage lenders were falling all over one another to lend money for home purchases. After the housing crisis hit in 2008, lenders were ordered and compelled to tighten up mortgage lending, leaving the majority of those home buyers post-housing crisis to stump up the cash, rather than getting a mortgage. 

We are expecting the levels we saw in 2006 (approximately 25% cash sales of all home sales) to return again once more. We are not saying that irresponsible lending is likely to make any sort of quick return, (although look at Freddie Mac’s latest announcement of 3% downpayment loans back again), but we can expect the cash sales figures to dip back to somewhere around 25% over the next year or 2. - Real Estate REO Virtual Assistants

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First-Time Homebuyers Discounts through FHA

People in the market for their first home can take advantage of a new offer from FHA. This new initiative aims to provide more information to buyers though classroom education and will reward them with a reduction in the premiums paid towards mortgage insurance.




HAWK to the Rescue

The name of the new initiative is called Homeowners Armed with Knowledge (HAWK). The borrowers are asked to complete a series of classes prior to buying the home as well as a few courses scheduled after the home has been purchased. At the time of this writing the classes are broken down in the following ways

* 1st class to be completed before the buyer completes a purchase contract

* 2nd class will be completed after a contract is signed and before the loan is finalized

* 3rd class will be completed within 12 months after the loan is finalized

Goals of the Program

Simply put, the HAWK initiative is hoping that people buying their first home will have a better understanding of the overall process thanks to the counseling and will be in a better position to make wise financial decisions in the future not only in regards to their housing but also to their other needs.

Monetary Benefit

Once the customer has completed the necessary classes their upfront mortgage insurance premium will be reduced along with the monthly premium that is paid as part of the mortgage payments. In addition, if the customer has no delinquent mortgage payments within the first 2 years of the loan the monthly premium will be reduced again.

Some Limits and Expiration Dates

Since this is a new program with no history to review the FHA is rolling this out with limits. The program is currently scheduled to only last for 4 years. In addition, not all FHA loans are going to be accepted under this program. At this time there is no news about how many loans will be allowed to use HAWK but FHA has stated that there will be a maximum number each year.

Class Time Requirement

For the class completed before the contract signing the prospective buyers will need to finish at least 6 hours of counseling and education.

The class that is conducted after the contract signing is a one hour class as well as the class that comes after the loan is closed.

Each class will issue a certificate to the students indicating that the course has been successfully completed. These certificates will be necessary in order to get the reduction in mortgage insurance premium.

In general, this is a great program that FHA is offering. It provides critical information to potential home buyers in order to better prepare them for a prosperous future and it rewards them by reducing the amount paid on their mortgage.

Take a look at --> Madison, WI Homes for Sale or browse through --> Janesville, WI Real Estate Listings!

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If you have been searching for homes online, then you know the 3 top sites for real estate listings:, and All 3 have their own unique differences, and you probably have your favorite, I know I do.
Zillow has only been around for less than a decade but has spawned millions of customers who feel online searching for property is a first step must. Zillow is known for their “Zestimate”, which many agents don’t find that helpful, but many home buyers like to rely on for accurate value estimates. A true estimate of a property’s value takes many factors into account, more factors than the Zillow algorithm calculates, like curb appeal, condition, upgrades, roof age etc.
Trulia is another real estate website that was also launched in 2005 (like Zillow) and this San Francisco-based site filled an important gap in the market. For years, potential homebuyers in the Bay Area were complaining about the lack of available information on property for sale in the San Francisco area and beyond. More often than not, the home prices were out of date or had been knocked up (or down) and the fact that so many sold homes were still appearing in magazines and newspapers despite saying otherwise was a source of great frustration for many property seekers in California. It was like finding gold in a valley, only to discover when you picked it up that someone else had already claimed it.
4359189907?profile=original has a slightly less user friendly layout and appeal, but since it was born a bit earlier than it’s competitors, many people have become use to it’s functionality and are loyal to it.
Now I do need to mention 1 other platform that is quite popular with consumers and that is the Coldwell Banker home search website. Now, Coldwell Banker is a Real Estate franchise and each office is independently owned, but their website for national home searches is quite competitive to the “Big 3”. And more specifically for California, is even more popular for California specific home seekers.
After you try each site for a while, you’ll find the one that fits your needs best and the one that you are most comfortable using. This, in addition to a great Realtor, should make your home searching and buying a enjoyable experience.

Have fun!!
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Who is a REO agent?

The real estate market is a very volatile place to conduct your business – and for many of us, it’s an absolute necessity. After all, you need somewhere to live, right? This seems to be the problem for a lot of people, though. Because they feel they “need” a real estate agent, they are less likely to actually take into consideration what is being said, at least fully. One of the “new” breeds of estate agent that has arrived in recent years is an REO Agent.
Various PR issues and a lack of understanding about the world of REOs leaves a lot of people with the opinion that they are only out for themselves – especially REO agents. However, when you can actually see what they are trying to do on the market for you – beyond the sales talk – then it’s far easier to take an REO agent at face value.
So what does an REO Agent actually assist you with?
They are, undoubtedly, one of the most important cogs in a deal which involves an Bank Owned property. They regularly get the best deals, and if an investor is looking to pick up a property for up to a fifth off the asking price they need to be prepared to do a little dealing and this will, at one stage, most likely involve an REO Agent.
While it’s easy to paint an REO Agent as somebody who benefits from the suffering of others, the work that they put in is simply incredible. For example, your traditional real estate agent will be helping sellers keep a home in good shape and offering advice to help sell it as fast as possible, and in return can get anything from 4-6% commission for giving advice, being there to assist and putting you in contact with the right people.
An REO Agent on the other hand will walk into a dilapidated and vacated home with squatting pets and dangerous appliances and get the sleeves rolled up, cover all of the repair and maintenance costs themselves for up to 90 days after the sale, and then turn the house around to make a sale in the end. They may only walk away with about 1.5% commission, by the way.
For all the talk of REO Agent and real estate agents doing dirty deals, teaming up or even just downright ignoring offers along the way for their gain and benefit, the majority of REO Agents get into this line of work because the “traditional” form of real estate agency has not worked out for them or they have been forced out of the market for a variety of reasons.
As long as you get the right Home Inspection team in and the right staff to help out with the process, working with an REO Agent can be much easier and if you are willing to tough out the bad days together you can really make a significant change around the household and get the price that you are really looking for. They can be hard working and they come with a bad name, but with a bit of faith and an understanding that they are not the same as your normal real estate agents, you can go a long way together.
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Zoning according to Investopedia refers to the municipal laws or local government laws which dictate the use of real properties in some areas. Zoning laws therefore tend to limit the commercial uses of the land area in order to prevent manufacturing business and other kinds of businesses which could begin in residential neighborhoods. But it is vital to note that these laws may be modified to allow for construction of some properties which allow for economic advancement.
Zoning therefore plans out the use of a land through a system of allocation of certain areas and includes restrictions within the different areas. Some of these restrictions may include the buildings height, the density of the area as well as the types of businesses that will be seen in these areas.
A good instance is that of the zoning laws which restricts parks, businesses and homes. The zoning area will therefore include the commercial, industrial, agricultural and school zones. Generally, zoning tends to be confusing to people as it is used to designate areas irrespective of the size of the state. The correct use of zoning allows for the development of cities and countries and impacts the lives of future property buyers, sellers as well as investors. This is due to the fact that zoning will always tell on the value of a property irrespective of it being residential or commercial. The major types of zoning today are basically:
Commercial Zoning – Commercial property basically refers to properties which are not residential and they range widely from small offices to mega shopping malls and night clubs. As a result of this, they are zoned commercially.
Residential Zoning – is basically the opposite zoning to commercial as it is done for individual family and can be manifested in zoning of single family homes, condos, duplexes and various other forms of apartments.
Industrial zoning – This zoning is basically for the operations of the manufacturing sector and for warehouses.
Agricultural zoning – This is usually mentioned in the same breath as the rural zoning as they basically deal with zoning regulations for ranches as well as farms.
Another Zoning type includes Historic zoning, which is used for historic monuments and buildings such as museums. Zoning is however not a totally definite situation in terms of rigidity as the option of using a variance gives the option of an exception. The process is long to acquire a variance, depending on the local government, but can redirect the future of a property in the long term.
Something else to note about types of zoning is that they also have sub-categories and we can take the example of the residential zoning which has the sub-categories of sleeping units which are designed for transient occupants’ e.g. motels and those that are for residents who dwell more permanently such as apartment houses.

If you are buying real estate, be sure to determine the type of zoning and restrictions placed on the property.

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Are you not sure how much of a down payment to put down on a home? You would need to consider that the figure will need to be at least 20 percent, if you want to avoid paying any Property Mortgage Insurance (PMI). This insurance covers all home buyers that have not deposited at least 20% as a down-payment on the value of their new home in the event you default on your monthly mortgage payments.
The lenders and banks will introduce this insurance as a way of protecting its own assets should the home buyer fall into financial difficulties and not be able to meet payments due. The lender can dip into the insurance funds and use that money to cover any short fall. In the United States it is possible to get private mortgage insurance or one from the government. The government scheme is handled by the Federal Housing Administration (FHA) and a number of companies are available for home buyers to use for underwriting private mortgage insurance.
How Much Premium Will I Have To Pay?
This depends on the amount of deposit or down-payment you have managed to raise on your new home. The PMI can vary from as little as 0.3 percent of the total value of the property per year, to as much as 1.15 percent. So, if you pay the smaller amount (0.3%) on a home valued at $200,000 you would look to be paying around $600 premium per year. The upper limit of 1.15% would see homeowners forking out $2,300 per year in PMI fees.
But this does not have to be a payment you would have to make throughout the lifetime of your mortgage; when you reach the stage where the loan-to-value ratio hits 80 percent, tell your bank or lender that it is time to stop PMI premiums as you won't need them at this point.
In fact, its law now that lenders should be telling you when you are likely to reach that 80 percent ratio and federal law insists the premiums must stop when the figure reaches 78 percent. The premiums will automatically be cancelled at this stage and you should not have to chase your lender for this to happen.
However, there are some Federal Hosing Administration loans that insist mortgage insurance premiums be paid for the life of the mortgage.

If you would like more information on Property Mortgage Insurance, be sure to ask your Lender directly.
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I'm sure you may have wondered what the average home buyer in the U.S. looks like today, or not so much what they look like but how old they are, where are they coming from, what sort of job or income are they earning and which region of the United States are they coming from.
It is all interesting information - to some - and in particular those in the business of selling real estate, prospectors, sellers and investors alike. So who are they and what is the market for real estate buying actually like in the flesh?
In the previous four years to 2013 in America the average age of the first-time buyer has been about 38 and an annual income just above $80,000. These are averages of course but in those four years the large majority of first time buyers have managed to put down a 25 percent down on the home they have bought.
So generally speaking, your average American has got a nice job and earns around $80,000 and has managed to save a large deposit to allow a lender to approve a mortgage for their new home, condo or apartment. It is possible to buy a nice condo in Florida for $100,000, so if you can afford the typical 25 percent deposit, your mortgage would be for $75,000. This is the average American today, or at least in the last four year period from 2009 to 2013 but you can rest assured that these typical average examples would not have been the case in the four year period between 2005 and 2009 nor the four-year stretch before that.
The housing market in America took a hefty downturn in 2007 and the car has only just stopped rolling down the interstate bank and coming to a rest but as America recovers. What about foreign investment in real estate properties? Just as Canada has enjoyed recently in affluent cities like West Vancouver, real estate buyers are flocking in to American cities from as far away as China and Vietnam. The Chinese have plenty of dollars since its economy began a boom from the early 21stcentury.

There are also many second home buyers looking to grab property and you will find the average age of these people is 47 and they will earn on average about $90,000. The majority of home buyers are from the south (41 percent) and the affluent north-east sees the lowest percentage (13%) of first time buyers.
You may be close to these averages, but you may not be in a more affordable home buying area. Whether you are buying your first or second home, be sure to contact a real estate professional for assistance.
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Real Estate News 8-24-2012

Stewart Title Spokane Facebook Page

5 Ways to Spot a Home with Hidden Potential
Trulia | August 23, 2012
Remember metal detectors? When I was a kid, they were all the rage, holding the emotional rush of a game with the a potential real-life treasure chest at the end.

Half of Homeowners Under 40 Are Still Underwater
The New York Times | August 23, 2012
The less time you’ve been in your home, the more likely you’ve accumulated little equity and seen the value of your property fall since 2005.

Short Sales vs Foreclosures: The Banks’ Preference
The KCM Blog | August 23, 2012
For months now, we have been letting everyone know that banks were going to begin shifting their focus when liquidating distressed properties. They would start supporting short sales over foreclosures. There is no longer any doubt this is now the new normal.

New Home Sales Up 3.6% in July, Matching Two-year High
The Los Angeles Times | August 23, 2012
Sales of new single-family homes rose to a seasonally adjusted annual level of 372,000 units in July, matching a more than two-year high for total sales, the Census Bureau said.

US Home Prices Make Big Quarterly Jump
FOX Business | August 23, 2012
Home prices rose 1.8% in the April-June period compared with the first quarter of the year, the Federal Housing Finance Agency said Thursday.

Some States Rank High on ‘Housing Misery’ Index
REALTOR Mag | August 23, 2012
Are some housing markets still suffering from the blues? Trulia’s Housing Misery Index takes into account the percentage of change in home prices from a state’s peak during the last decade compared to today as well as the percentage of mortgages that are either severely delinquent or in foreclosure.

Household Income Drops Sharply
The Washington Post | August 23, 2012
Inflation-adjusted median family income fell to $50,964, below where it stood before the recession.

Lost Decade for Shrinking Middle Class
The Wall Street Journal | August 22, 2012
The middle class — defined as households with between two-thirds and double the nation’s median income — has shrunk considerably over the past few decades, a decline that has been greatly exacerbated by the recession and housing bust.

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Marshall Short Sale ClosingWe are happy to announce that last week we had another successful Wisconsin short sale closing, this time in Marshall. As you have likely heard, short sale transactions can be complex, and an experienced Short Sale Realtor® is a must.

This was a great home that the new owner is sure to enjoy! If you are thinking of selling or buying a short sale home in Wisconsin, our short sale specialists would be happy to assist you. Give Rock Realty a call at 877-774-7625.

Or, if you are considering a short sale for your home, feel free to fill out our no obligation

Short Sale Home Evaluation Form

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The $25 billion robo signing settlement was reached with 5 banks recently, but what effect is this really going to have. For most of us, nothing. But even for those who will receive payment from the settlement it will be very minimal.

However, this will have a hugh impact on the market. These banks are most likely getting ready to release a ton of foreclosures on the market that were previously unreleased because they were tied up in this litigation. Now that they have settled, and they know that they can move forward with the foreclosures, get ready,

If you are a licensed agent and not actively listing or selling foreclosures, now is a good time to start.

If your a buyer waiting for a great buying opportunity...well it has been here but now it is about to get even better.

"We expect to see foreclosure-related sales increase in 2012, particularly pre-foreclosure sales, as lenders start to more aggressively dispose of distressed assets held up by the mortgage servicing gridlock over the past 18 months," said RealtyTrac CEO Brandon Moore in a press release.

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FHA Rehab 203k MortgageUsing FHA 203K Loan to Purchase a Fixer-Upper

Across Wisconsin there are a large number of short sale homes available to buyers.  A short sale is a home being sold for an amount less than the existing mortgage balance.  These homes often have a few cosmetic repairs that need to be made in order to make the home more presentable, if not safe.  For years the issue of repairing a home prior to purchase was a catch 22.  The bank or seller was not willing to spend extra money on a home that they are selling.  The buyer could not make the repairs because they did not legally own the home.  The FHA 203k loan solves that problem with ease.

Two Kinds of Loans

The Federal Housing Authority (FHA) offers a loan called the 203k mortgage, named after the code section where the loan is found in the FHA guidelines.  This loan is offered as a Streamline version and the regular version.  The streamline was designed to offer lower amounts designated for repairs and slightly less paperwork.  Both loans are ideal for Wisconsin homebuyers who wish to purchase a home in need of some repairs.

How the Loan Works

The loan program allows buyers to purchase a home based on the sales price.  In addition, the buyers can borrow extra money to make the necessary repairs. Once the loan is approved and closed, the extra money is placed in an escrow account.  The contractor that is doing the work will receive payment once the work is completed. This protects the borrower and the lender against problems with the repair process.

The amount needed for repairs is added to the loan for the purchase and the homebuyer makes one payment, at one interest rate, on the entire loan.  Since mortgage rates are so cheap right now it is a wonderful way to buy a home that may be priced below market value due to some simple fix-ups.

Loan Amounts

The Streamline 203k loan will allow Wisconsin homebuyers to borrow a minimum of $5,000 and a maximum of $35,000 to be used towards the repairs.  The regular 203k loan allows much more as a percentage of the sales price and the estimated appraised value after the proposed repairs have been made.  The regular 203k loan will need the involvement of an appraiser, home contractor and loan officer from the very beginning to make sure the loan and repairs meet the guidelines of the program

What Can be Done with 203k?

Wisconsin homebuyers often ask about the types of repairs that can be done with the Streamline 203k program.  The following list shows some of the more popular tasks accomplished using this type of loan

  • New gutters and a new roof
  • New Heating and air conditioning system or repairs to the existing system
  • Plumbing updates and repairs
  • Electrical updates and repairs
  • Bath and kitchen remodels, to a lesser extent
  • New flooring of any type; wood, carpet, tile
  • Painting for both exterior and the interior
  • New windows and doors
  • Energy efficient appliances

The 203K loan allows many types of repairs and improvements that can greatly enhance the value of a home and give buyers a chance to purchase a place at a savings. This loan is ideal for Wisconsin short sales or foreclosures.

Original Post - Using a FHA 203K Mortgage for Rehab

This communication is provided to you for informational purposes only and should not be relied upon by you. Rock Realty is not a mortgage lender and so you should contact a FHA lender directly to learn more about its mortgage products and your eligibility for such products.
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No Money Down USDA Mortgage

USDA MortgagesUnderstanding the No Money down USDA Mortgage

Buying a home in Wisconsin with no down payment is still a reality thanks to the USDA program.  The Rural Development section of the United States Department of Agriculture (USDA) has made great strides in the past two years to educate loan officers and potential borrowers of the benefits of this program.  The mortgage offered by the USDA is quite different from other programs and is a great way for people to purchase a home without a costly down payment.

Mortgage Insurance

Unlike conventional loans and FHA loans, the USDA loan does not require any mortgage insurance.  This means that every dollar of every payment is going towards the principal, the interest or the escrow for the home.

Closing Costs Paid by Seller

A conventional loan allows the seller to pay closing costs up to 3% of the purchase price.  Similarly, FHA will allow the seller to pay closing costs up to 6% of the purchase price.  However, USDA has no limit on the amount that can be paid by the seller.  This means it is possible to find a house and purchase it without paying a down payment or any closing costs.

Property Location

In order to be considered for the USDA loan a home must be located in an area designated as rural by the USDA.  However, would it surprise you to learn that of the 72 counties listed in Wisconsin, 50 of those counties are considered rural?  And the remaining 22 counties have sections that are considered rural. This means that there are numerous homes that could be eligible for this type of loan.

Income Limits

There are also some limits on the person’s income.  The USDA bases the limits on the total number of people that will occupy a home.  For example, a family made up of a mom, dad, and three children under the age of 18 will be allowed more income than just a married couple.  A Wisconsin loan officer can look up the limits for each county and let you know if you meet the guidelines.

Loan Limits

The maximum amount allowed for a USDA loan is different for each county in Wisconsin.  However, the limits are very liberal.  Some counties, such as Ozaukee and Dane, will allow qualifying borrowers to get a loan up to $230,000.

Not For Select Buyers

Some people are under the impression that the USDA loan is only for Wisconsin borrowers looking for their first home.  However, nothing could be further from the truth.  People buying their first home or their fifth home can use the USDA loan.  The only stipulation is that the property must be the borrower’s primary residence.

It has been mentioned in the news a lot in the past three years that mortgage rates are at an all-time low.  When rates are so low it is only a matter of time before they start to rise.  Take the opportunity to talk to a Wisconsin loan officer and find out if you can get a home using the USDA loan.

This communication is provided to you for informational purposes only and should not be relied upon by you. Rock Realty is not a mortgage lender and so you should contact a USDA lender directly to learn more about its mortgage products and your eligibility for such products.

Original Post - Understanding the No Money Down USDA Mortgage

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My client just bought a new home two years after we did a successful short sale on his previous home. He now has a mortgage at half the interest rate he was paying previously.  His new home is  approximately half the purchase price of his old home that he purchased in 2004, and his new payments are a third of the old payments. Icing on the cake is that the new home is larger, move in ready, with a two year warranty. More icing? His new payments are $315 a month lower that his small rental.  Yes, it really is less expensive to buy than rent.

How did we do this?  Of course timing is everything.  Prices in this area are 50-60% lower than they were in 2004. There is a good inventory of homes that are reduced accordingly.  When we completed the short sale on his first home, I told him to keep the rest of his credit clean, pay the rent on time, and he would be able to buy again.  It didn't hurt that he was a V.A. buyer.  V.A. buyers can buy a home again two years after a short sale. 

Unfortunately, many figure their credit is shot anyway, so they drown their sorrow in their credit card debt.  After going through the trauma of losing their home, they may think they will never buy again.  But after living in a rental house or worse yet - an apartment, they change their mind.  The desire for home ownership is very strong and everyday I am amazed at the lengths buyers will go to in order to have their very own home.

Every situation is different.  Did you sale your home or walk away?  What is your credit and employment like? What kind of loan are you looking for FHA, VA, or conventional?  See a good loan officer who can assess your situation and give you advise on how to find your way back to home ownership again. Don't wait too long; it may take time and who knows where interest rates will be this time next year.

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What a month!  Not many new REO Listings came across my desk this month.  However, all 8 of the Pending offers who were so eager at the begining of the month to buy these REO homes, You know the ones with the Broker who call 3 times a day just to see if any Seller Contracts has come in yet. As a Full Time REO Broker, I always try to educate all Brokers who have a buyer the meaning of as-is and what to expcet during the REO Transaction process, as well as the standards that the Seller expects of me.  I always promise the Brokers I will get them the sellers contracts asap.  I want more than anything to get this property under contract. Something must have been in the air this month because around the end of last week I practally had all but 3 transactions fall apart.  2 of the 3 were transactions I put togher and closed myself.  It makes me wonder, Hmmm was  I not clear enough to the Brokers what the meaning of As-Is before they made their offers?  Or are these buyers thinking they can just take up peoples time and try to ignore the As-is factor?  I hope next month will not be that way with the holidays creaping around the corner.  Did anyone else have an experience like mine or am I the only One?
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Case Shiller: Will We Double Dip

Case Shiller report shows a deceleration in the annual growth rates in 17 of the 20 MSAs. Housing generally leads the economy out of a recession. This time its not, housing is simply suffering. Not only is money tight but job creation is still a big hurt. In some cities, the decline over the last year was quite sharp.

David M. Blitze,chairman of S.&P.’s index committee tells the NY Times that a double-dip could be confirmed before spring. He goes on to say the series is now only 4.8% and 3.3% above their April 2009 lows. Certainly nine cities set new lows, and with the only positive news concentrated in southern California and Washington DC, the data point to weakness in home prices.

S&P sounds dismal, indeed. David Wyss, S&Ps chief economist tells martketwatch that The recovery in home prices has not only stopped, it's going in reverse, that it's going to get worse before it gets better

Some Balance Is Needed

Artificial Stimulus
The tax credit
First, the index to a positive spike due to the tax credit, an artificial inducement to buy. Well it worked, and we saw buyers flood the market. But comparing new data to a spike that doesnt represent normal market behavior, but a artificial spike in home sales due to the tax credit can skew the true picture.

This is the slowest part of the year for home sales and must have something to do with the steep decline

Could the weather have been worse for the mid west and east coast? Winter is traditionally a poor indicator of market health.

Certainly, this market needs no excuses and Im not second guessing S&P, but lets not lose perspective - winter data is hardly a leading indicator for housing markets and there is more to the story than the data is expressing.

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Rent Vs Buy Today

NAR Existing Home Sales

Existing home sales which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 5.6% to a seasonally adjusted annual rate of 4.68 million in November, but are 27.9% below the cyclical peak of 6.49 million in November 2009, which was the initial deadline for the first-time buyer tax credit. Median existing single-family home prices rose year-over-year in 77 of 155 metropolitan areas and fell in 76 metro areas.

NAR Pending Sales

A forward-looking indicator, rose 10.4% based on contracts signed in October from in September. The index remains 20.5% below a surge to a cyclical peak in October 2009, which was the highest level since May 2006.

Rent Vs Buy

The argument for affordability has a few key components. Price, cost of money and a comparison to a similar property rental.

Home prices are running about 22% less than five years ago. Its hard to know when price has reached a point where willing buyers step up, but pending sales clearly point to a slowing trend. The Commerce Dept. report showed that new home sales rose 5.5 percent to an annual rate of 290,000 in November from the revised October rate of 275,000.

Price will continue to decline and increase affordability. There are some that think a double dip is in progress and we will see continuede price declines through 2011 or 2012.

Cost of Money
Lower tax rates just extended for another two years may boost growth. Mortgage rates responded by increasing to a six month high with rates up more than half a point in just the past month. NAR President Vicki Golder, points out: A decade ago, mortgage rates were almost double what they are today, and they’re about 1.5% lower than the peak of the housing boom....So still historically low.

Rates remain low and are still well below where they began the year. Low mortgage rates are an important factor affordability, which in October was the highest on record

Rent Comps
Rents increased for the second quarter in a row. Asking and effective rents increased by 0.5% and 0.6% respectively in the third quarter and vacancy rates dropped from 7.8% to 7.1% nationally.To summarize, price is dropping but cost of money is rising and so are rents. Most areas havent reached a balance between the cost of renting and the cost of buyi ng, probably the main arguement for home prices continuing to descend to meet a willing buyer.

Rule of thumb: Homes are probably fairly valued at about 15 times a year's rent. So, for example, if you're paying $15,000 a year to rent a place, think twice about buying a home that costs more than $225,000. Fifteen times is the historic average.

Your home is not a growth stock. You should look to justify multiples higher than 15 to 20 by considering personal needs, proximity to schools and transportation, your own cash flow situation and job security.

It would also be advisable to get a sense of what the property would likely rent for and see how far that rent would go towards paying the mortgage should you have to move. Home sales are slowing and if you find yourself a reluctant landlord, be sure you can carry the mortgage.

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I have been hearing more and more objections from my buyers about purchasing a home TODAY because they keep hearing that the market is going to decline further, so they don't want to be in a negative equity situation. In addition, they have heard that there is going to be a "mad rush" of foreclosure properties soon, so maybe they should wait...

I wanted to start this discussion in hopes that we can all help each other handle this objection so we can all be more successful!

I have been handling it this way; Well, Mr. Buyer that may happen, however, even if you waited to purchase a home that was 5% lower in price, you may end up paying more if the interest rates increase. They are bound to increase in the near future, so do you want to take that chance?

Just some thoughts and I would love to hear your opinions...

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Well everyone.

I recently engaged a discussion on Linked In about flaky REO agents and some of it was pretty know agents pointing fingers at one I have reproduced some of my thoughts here because they were revelant and I beleive propel us agents (none of us are flaky agents here!) to a higher level.


More REO Listing Agent Lies, BS & Laziness!

I have consistently given credit to REO Listing Agents for earning their lofty position. Now the other side of the coin! "Homes listed in the MLS that show active are active" Lie! Unreachable and lazy REO Listing agents have the rest of us running around in circles and taking their word only to find out an offer has been accepted. How about the geniuses that put only a combo box on the home and don't answer their phones? And don't most REO listing agents give their clients the best chance to buy the home? Even if it calls for (nod and wink) exchanging information about other offers?

What do you think?

Tony Lewis RE/MAX of Valencia, Ca. www.TonyLewis 661-702-4720


Well I always enjoy these heated discussions and time for me to weigh in as a buyer's agent:
Price your listing correctly...if it sells more than 103% of list you did't price it correctly and it deceives my buyers...they get frustrated.
Price it with the notion that an FHA buyer wants to buy it...that means closing costs too...offer a cash discount or something like that.
Please keep the bugs out of it and I mean roaches...this looks bad and it reflects on me too. MUST know if the condo is FHA approved...the health of the association, want to sell it right?
While you get 40- agents calling you on it...I have one buyer that easily gets frustrated when we put in an offer and never get an official rejection. They think its my fault and want to use another agent...just think of that!
Don't require cross the time your LO gets with my client...the property is gone anyway...(see above). All that exists anymore are direct lenders.
Please learn something about the property you list...all 100 of them!
Answer your phone or email rapidly... my buyer wants to know....if you need to have a contact person listed for this.
Yes, I want to know how many lenders you have and who is the lets me know what the process will be like.
Put a Supra Box on...always...combo locks and me do not get along always.

There it is...apply this to be a listing agent and you have it.
Be QSC certified... I am and clients know I am quality.
Asset managers...if you are reading this...this is just a glimpse of the superior service some of us agents perform to. Maybe we didn't take you class or sell lots of listings but what you get is dedication!

the discussion went on and I concluded with some more info:

Christine, I guess life is different in Texas. Based on that concluding commentary about LOSING money on a listing, I wonder why anyone would want to manage it? I would think that in any case about being party to a are representing the interests of the seller (investor or AM) and at least out here I have run into a few that run their operation like a machine in a factory and I do not think that has changed anything...and yes I imagine the AM's are just like any other seller...I have had them dispute my BPO a time or two before (why do they need my opinion if they think they know better anyway?)
Among the more glorious things I have noted in my REO travels,is that one agent uses a message board: upon offer submission, he gives a logon and password and we can view a message board that has commentary about the process at any given time...never a need to call.
Another uses something called RapidLInk that gives us the code to any of her listings...we just register once on her website and after our info is verified, we can type in the listing address and get the code asap!...again no phoning or texting! I would never report someone to their AM because I feel that at one time justice will serve itself acccording to one's merits.
I sometimes too, Christine would like not to be a buyer's agent since we are glorified tour guides at times and I would rather have a professional realtionship with A person. Yet AM's always ask " how many properties you have listed?" Apparently selling them doesn't count and that is part of my frustration. For the record Chrsitine,I am sure you are one of the good ones that actually do what you are supposed to do as I imagine it is a struggle to just 5 REO' to list consistently.

In summation we can tell this:
Communication is paramount between agents on both sides of a transaction.
Don't bother the other agent for obvious information.
Seek feedback about your listing
Be diligent even as a buyer's agent when in escrow (real life: had an investor/agent tell me he appreciated how diligent I was and was more than willing to advise me of his current and upcoming inventory and have priority on open houses..looks forward to my next offer!)
Can anyone add something?


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New Home Credit and First Time BuyerCredit of $10,000 goes into effect May 1, 2010. $100 million isallocated to the New Home Credit and $100 million to the First TimeBuyer Credit.

The very popular New Home Credit in 2009 ran out ofmoney quickly. It generated so many sales that it was re-introducedagain this year along with the First Time Buyer Credit.
The money for the First-Time BuyerCredit is expected to run out much faster than the New Home Credit thisyear.

Theeligible taxpayer who purchases a qualified personal residence onand after May 1, 2010, and on or before Dec. 31, 2010, or whopurchases a qualified principal residence on and after Dec. 31,2010, and before Aug. 1, 2011, pursuant to an enforceable contractexecuted on or before Dec. 31, 2010, will be able to take theallowed tax credit. The credit is equal to the lesser of 5 percentof the purchase price or $10,000, in equal installments overthree consecutive years. Under AB 183, purchasers will be required tolive in the home for at least two years or forfeit the credit(i.e., repay it to the state).

HOWEVER...this money willgofast
The $100 millionallocated for California's first-timehomebuyer taxcredits may be depleted in about 20 days or sooner. Thetotal tax credit allocation for all taxpayers is $100million for first-time homebuyers and $100 million for new homes, bothon a first-come, first-served basis.

For an update on howmany applications have been filed and for the dollar amount, watch thissite:
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