homebuyers (3)

Easton V Strassburger...Has Anything Changed?

It never ceases to amaze me that the Homebuyers I have run into lately just do not understand that buying a home is serious business and requires someone assisting them that looks out for there best interests.

We remember in our training that for the longest time until recently on the galactic time line, there waas no such thing as a buyer's agent ; that only the sales agent selling a home existed.  The buyers were on their own. Then laws came up about disclosure and the buyer's agent was born.

I dont think much has changed really...in a buyer's mind.

Lately this is what has happened in my realm:

Had a buyer come through my open house three weeks ago and they wanted to write an offer on another neighboring house I showed them that day.  They were ecstatic that the home was perfect and they even measured where their furniture would go.  THEY ALSO TOLD ME THAT THEIR LISTING AGENT WAS NOT ALWAYS ACCESSIBLE AND SHE DID NOT LIKE HIS "TOO GOOD FOR THEM" ATTITUDE.

At the contract signing they stalled because they she started to think about the tax liability of a property switch despite the fact my research showed that they, because of her age could retain her property tax. They then wanted to rely on the tax position of their listing agent, despite the fact that this agent was not licensed to dispense tax advice ( I am a tax preaparer too with a CTEC license). Some checking determined that the office listing agent would not even have my offer considered (it was 13% off of list price).

In the end they wanted to only work with their agent only 24 hours later.

A week later I found them a property in the same area within their means and these buyers were offended that I was still going out of my way trying to help them,despite they had bad vibes with their listing agent.

 

More recently a brother/sister were going to buy a duplex to live in together. I had been working with the brother for 5 years on and off.  I met with them on Saturday and wanted them to sign an exclusive representation agreement.  The brother was ok but sister claimed I had not been in touch with her ( I was never able to get the sister on the phone but I could always follow up with the brother.) The sister said she was talking to another Realtor and so they agreed to meet and interview her. 

As of today, brother called me and was shocked that other Realtor said I was not doing my job and subsequently supposedly she was in contract on a home (wonder what "shiny" thing she was told ie "flash a shiny object and they will be attracted"). As it is, the brother is going to work with me to find him his own home.

Homebuyers just dont get it: Many times their home buying success is a product of their own dedication. Not what any one agent finds them...but it is just because they are in the right place at the right time.

They forget that there is alot of diligence and that is why we agents get our 2 or 3 % or whatever...not because we turn keys.

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Federal HomeBuyers Tax Credit Extensions


The U.S. House has passed a bill giving home buyers an extra three months to complete their purchases and still qualify for a generous tax credit.The Senate is working to reach an agreement with Republicans to pass the House-passed homebuyer tax credit closing date extension early as today.

Although the case shiller index came in suggesting a fragile recovery is waning, it didnt include the sales figures representing market behavior after the end of the homebuyers tax credit. It got worse. Home sales fell more than 30% since the expectation of the end of the homebuyers tax credit. No doubt this didnt go unnoticed in Congress.

Its clear that the Case Shiller numbers indicated a real estate market that was having trouble holding ground in the face of the end Govt support of real estate markets, that the stimulus was necessary and effective.

The 20-city index

15 out of 20 cities showed month over month declines, though the overall index increased 0.3, showing a 5% comeback in April 09. When the Obama Administration said it would pull support on housing markets, it did caution us that if necessary, they would return.

Real estate markets suffer from serious supply and demand problems. The foreclosure and the shadow market present a huge inventory overhang. And 30% decline screams loudly that we still need support. If the stimulus program gave us a market that moved and soaked up inventory, then its pretty clear that that normal market forces are still not able to float this boat.The pending stimulus extension wont cure the markets ills, but it created sales and that will go a long way towards preventing a double dip.

There are those who are opposed to market supports. That are afraid we are moving more and more towards a managed economy and want the chips to fall where they may. Thats the American way. Others argue that the markets or Capitalism was not the issue, its just that financial engineering and technology got ahead of the regulators and that all we need to do is regulate better. Personally, all that matters is that we dont look that rabbit hole in the face again. Let the chips fall where they may smacks of chaos and regulation may be necessary, but its slow and we all know its the regulators that influence and create the rules anyway. And so to my mind. if all it takes is $8000 a pop, to soak up supply and get out of this morass, one house at a time...then so be it. Pass that bill!

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FHA makes Policy Changes to Lower Risk

I just saw this article by Carrie Bay of DS News. Something we will all need to keep in mind as we qualify buyers.The Federal Housing Administration (FHA) said Wednesday that it is raising homebuyers’ up-front costs for mortgage insurance, tripling downpayment requirements for borrowers with low credit scores, and cutting seller concessions in half.The agency says the new policies for its government-insured mortgages will help FHA better manage loan risk and losses. According to FHA’s latest monthly activity report, nearly 9 percent of the single-family mortgages it insures against default are at least 90 days past due. The record-high delinquency rate has sent the number of claims FHA has been forced to pay out skyrocketing and left its capital reserve fund depleted – falling below what’s required by law for the first time since the agency was formed.The FHA currently backs about 30 percent of all new loans for home purchases and 20 percent of refinanced loans. The agency’s share of the mortgage financing market has increased nearly 1,000 percent (yes, that’s 1,000) since 2006, as private lenders pulled back and the credit crunch set in – it’s a position that FHA Commissioner David Stevens says can’t be carried on for the long-term. He insists it’s essential that the federal mortgage insurer’s portfolio eventually return to pre-crisis levels and back to its original credo of providing financing for homebuyers in underserved parts of the country.But for now, Stevens said, “Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important.”Stevens called the new policy changes “the most significant steps to address risk in the agency’s history.”As part of the plan, FHA is increasing up-front mortgage insurance premiums paid by borrowers from 1.75 percent to 2.25 percent. The change will go into effect “in the spring,” the agency said.Stevens has also requested legislative approval to raise the maximum annual premiums that FHA can charge. If this authority is granted by Congress, then the second step will be to shift some of the premium increase from up-front to the annual fees assessed. FHA says this shift will allow it to increase capital reserves with less impact to the consumer, because the annual premium is paid over the life of the loan instead of at the time of closing.New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5 percent downpayment program. Homebuyers with less than a 580 FICO score will be required to put down at least 10 percent. This change is expected to take effect early this summer.Changes are being made on the seller side of the equation, as well. Beginning this summer, the amount that sellers can kick in – typically in the form of closing costs – will drop from 6 percent to 3 percent of the home’s value. FHA says the current level exposes the agency to excess risk by creating incentives to inflate appraised value, and the reduction will bring its criteria in line with industry standards on seller concessions.In addition to the policy changes introduced, the mortgage insurer plans to beef up oversight of FHA lenders. Beginning February 1, lender performance rankings will be available to the public on HUD’s Web site.FHA is also planning to implement statutory authority to enforce indemnification provisions for lenders that delegate their insuring processes, and is pursuing legislative authority to increase enforcement on FHA lenders. The authority would include requiring all approved mortgagees to assume liability for all the loans they originate and underwrite, as well as the ability to withdraw FHA approval for a lender nationwide if the performance of one of its regional branches is faulted.Robert E. Story, Jr., chairman of the Mortgage Bankers Association (MBA), commented “MBA supports FHA’s efforts to root out those lenders who pose undue risk to the program. We will work with FHA to ensure those efforts include fair and thorough investigations and appropriate due process for lenders who could be impacted.”The agency expects these steps to tighten up its standards will help mitigate rising defaults and pay-out claims, and give a much needed lift to its capital reserves in order to avert what so many economists are proposing – that the federal agency itself will need a taxpayer bailout.
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