Tuesday, January 22, 2019
Friends Don't Let Friends Give Away Their Home Equity! :-)
I am writing this post as your friendly neighborhood realtor. I am seeing heavy advertisement from large tech firms and those representing large hedge funds to make you a "offer" on your home and a quick closing. They are showing lots of videos about how you do not have to bother with showings and being inconvenienced by contact with people to sell your property. Let me tell you.. unfortunately they are simply not being honest. As a professional I already understood their business models but I want to pull the curtain back for you.
These firms do not offer you appraised value. They start off with a lower algorithm value ( similar to less than a Zillow algorithm). They reduce that price by realtor commission. Reduce again for their closing costs. or they call it a "liquidity" fee of 8% to 16%. They will also complete an inspection on your property and reduce the property for all of their repair costs to rehabilitate your property and then give you the NET after all of these fees. This becomes your "final" offer price and if you do not accept they will cancel the sale.
In a traditional sale with a Realtor, we comb the MLS for all the recent sales and view similar property condition and types of homes and discuss what we are seeing as avg seller concession. We place your home on our open market to give you wide exposure for your property so you have the opportunity to receive the highest and best offer. The cost of sale is Realtor commission and any buyer closing cost concession.
Is it not WORTH a few people walking though your home upfront to keep thousands ( I have seen offers 10k-over 100K lower than property value being offered) in your pocket? You can use this money for so many things! This could be your money to move you to another property more comfortably or even if you went on vacation or whatever! Why give it away just because someone is telling you it is "easy"! Let me tell you! Maybe it was easy to earn money while you simply lived in your home but friends don't let friends give their hard earnest $$$ away!!
Also please think of your neighbors you leave behind.. each time a sale occurs in our neighborhood that is under value it hurts the next home owner that lists their home for sale. As a Realtor for the past 20 years I have been around to see many of the cycles I know! After the recession of 2008 we witnessed our property values plummet and snatch our properties up for little to nothing.. then the hedge funds came in and convinced the banks to simply bulk sale them all the foreclosed properties. Those hedge funds tightened the market and placed properties in their funds and watched values increase and their profits grow. The tech companies have the deep pockets and control over the algorithms to tell you from California what your property is worth sight unseen.
We are seeing our values comeback and we should be the ones to reap that benefit. If you need a free easy home valuation with no pressure.. I am happy to help you and go over all the details you may be concerned about. I have helped my clients transition from selling to purchase many times and in the recession I saved my clients homes from foreclosure or if they were ready to move on I completed hundreds of short sales.. thank you for reading :-)
Saturday, November 7, 2009
New Rules for Overbidding on HUD Homes!!
Those of you who have previously bid on HUD homes or have heard of some horror stories about trying to buy one.. well things are getting better on the bidding process. Many agents have found it increasingly difficult to win the HUD bids for their clients as many other agents routinely over bid on the properties hoping to obtain a higher appraised value. Many times the higher appraised value is not obtained and the purchaser is either unwilling or unable to bring the cash difference to the closing table, thus wasting a lot of time and unnecessarily keeping properties off the market.
Well, the rules have now changed and this is going to help owner occupants get the home they desire for a fair price!!
What if my offer price is higher than the appraised value?
FHA guidelines will limit the underwriter to insuring the loan for the lower of two values; the offer price or the appraised value (displayed as the As-Is Value). If your offer price is higher than the appraised value, the FHA underwriter will require that your buyer(s) cover the overbid amount with a cash deposit. The buyer(s) will not be allowed to build the overbid amount into an FHA loan.
HUD’s mortgagee letter 2000-27 will require that the FHA UW (Under Writer) use the appraisal obtained by PEMCO. This mortgagee letter instructs the FHA UW NOT to obtain a new appraisal; nor can the FHA UW request that new comps be pulled and the PEMCO appraisal updated.
If your offer price is higher than the appraised value and tentative acceptance is extended to you, the options available to you are:
1. Proceed with contract execution. PEMCO will require that the selling broker verify that the cash reserves are available to cover the overbid amount before we execute the contract.
2. Use cash or conventional financing. All of the guidelines outlined above apply to FHA financing only. A conventional lender will have their own set of guidelines not governed by HUD.
3. Cancel prior to contract execution. If there is an acceptable backup, we will award tentative acceptance to the backup offer. If there are no acceptable backup offers, the property will be relisted.
If an investor or any buyer gets a property awarded, but Buyer’s lender does not accept HUD’s appraisal, and the value comes in lower in another appraisal, can HUD adjust price? Absolutely not.
If an investor cancels escrow due to property financing because of value not being there, does he lose his deposit? Yes.
Refer to Addendum A. The only guidelines that will allow an investor to get any portion of their earnest money back is if an investor is using FHA financing and the FHA underwriter determines that the investor is not an acceptable borrower, then 50% of the earnest money deposit will be refunded.
As you know, FHA’s loan products are not set up for investor use; so the potential for an investor to receive any portion of their earnest money back is remote.
What about if property was purchased under Owner Occupancy, will the same rules apply?
Answer – Yes, the same rules apply, but if you read Addendum A, you will find that this addendum has many more provisions when it comes to returning all or a portion of the earnest money deposit to an owner occupant buyer. If the underwriter determines that the value of the property has dropped below the purchase price, PEMCO could determine that the cancellation of escrow is based on “other good cause” and it is probable that 100% of the earnest money will be refunded.
Well, the rules have now changed and this is going to help owner occupants get the home they desire for a fair price!!
What if my offer price is higher than the appraised value?
FHA guidelines will limit the underwriter to insuring the loan for the lower of two values; the offer price or the appraised value (displayed as the As-Is Value). If your offer price is higher than the appraised value, the FHA underwriter will require that your buyer(s) cover the overbid amount with a cash deposit. The buyer(s) will not be allowed to build the overbid amount into an FHA loan.
HUD’s mortgagee letter 2000-27 will require that the FHA UW (Under Writer) use the appraisal obtained by PEMCO. This mortgagee letter instructs the FHA UW NOT to obtain a new appraisal; nor can the FHA UW request that new comps be pulled and the PEMCO appraisal updated.
If your offer price is higher than the appraised value and tentative acceptance is extended to you, the options available to you are:
1. Proceed with contract execution. PEMCO will require that the selling broker verify that the cash reserves are available to cover the overbid amount before we execute the contract.
2. Use cash or conventional financing. All of the guidelines outlined above apply to FHA financing only. A conventional lender will have their own set of guidelines not governed by HUD.
3. Cancel prior to contract execution. If there is an acceptable backup, we will award tentative acceptance to the backup offer. If there are no acceptable backup offers, the property will be relisted.
If an investor or any buyer gets a property awarded, but Buyer’s lender does not accept HUD’s appraisal, and the value comes in lower in another appraisal, can HUD adjust price? Absolutely not.
If an investor cancels escrow due to property financing because of value not being there, does he lose his deposit? Yes.
Refer to Addendum A. The only guidelines that will allow an investor to get any portion of their earnest money back is if an investor is using FHA financing and the FHA underwriter determines that the investor is not an acceptable borrower, then 50% of the earnest money deposit will be refunded.
As you know, FHA’s loan products are not set up for investor use; so the potential for an investor to receive any portion of their earnest money back is remote.
What about if property was purchased under Owner Occupancy, will the same rules apply?
Answer – Yes, the same rules apply, but if you read Addendum A, you will find that this addendum has many more provisions when it comes to returning all or a portion of the earnest money deposit to an owner occupant buyer. If the underwriter determines that the value of the property has dropped below the purchase price, PEMCO could determine that the cancellation of escrow is based on “other good cause” and it is probable that 100% of the earnest money will be refunded.
Monday, October 19, 2009
Lawmakers to Extend $8,000 tax credit!!!
Lawmakers seek to extend $8,000 tax credit
from associated press (AP) – 3 days ago
WASHINGTON — Lawmakers are trying to extend and expand an $8,000 federal tax credit for first-time homebuyers, a stimulus-package tax break that many regard as a significant prop for the still-tottering economy.
The latest Senate proposal would drop the requirement that the credit be available only to first-time buyers, broadening the reach of the program but also adding to its cost, estimated by congressional analysts at $16.7 billion.
The backers of that idea, Sens. Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn., chairman of the Senate's banking committee, have suggested that their measure be attached to another pending bill aimed at throwing a lifeline to people hit by the recession, an extension of federal assistance to the millions in danger of exhausting unemployment insurance benefits.
While the White House says there will not be a second stimulus package following the $787 billion economy booster enacted last February, extending the homebuyers' credit and unemployment benefits are among several primary means being pushed by the administration or Congress to help people get through the prolonged economic downturn.
Others include continued subsidies for laid-off workers trying to keep their health insurance and a proposal by President Barack Obama to provide seniors and others with a $250 payment to make up for the lack of a Social Security cost of living increase next year.
The stimulus-package credit allows first-time homebuyers to reduce their federal income taxes by 10 percent of the price of a home, up to a maximum of $8,000. The credit, which could cost in the $12-15 billion range this year, is set to expire Dec. 1.
The Isakson-Dodd proposal would extend the credit to June 30, 2010. It would also remove the first-time homebuyer requirement and raise the eligibility income limit to $150,000, or $300,000 for a couple. That's double the current phase-out limits.
As with the Cash for Clunkers program for cars, skeptics have questioned whether the credit will have any long-term effect on the housing market.
Brookings Institution economist Ted Gayer wrote in a recent report that the tax credit is "very poorly targeted." He calculated that of the 2 million or more people who would make use of the credit if it were extended for a year and expanded to cover all buyers, only about 383,000 would be additional sales motivated by the credit. He estimated that the real cost of the credit would thus be more than $40,000, rather than $8,000, per buyer.
But believers say it has been instrumental in sustaining an economic recovery highly dependent on housing.
The National Association of Home Builders, the source of the 383,000 figure for increased home purchases, pointed out that this would also create more than 347,000 jobs, generate $16.1 billion in wages and salaries and $12.1 billion in business income.
"Homebuyers for the past two years have been sitting on the fence and we needed something to move them into the market," said Lucien Salvant, managing director for public affairs at the National Association of Realtors. With more foreclosures coming next year, "to knock the props out of the housing market at this point would not be a wise move."
The NAR, together with the NAHB and the Mortgage Bankers Association, have been running ads in the Washington area urging Congress to extend the homebuyer tax credit.
They note that home sales to first-time buyers have increased by 25 percent in 2009 and now account for 50 percent of all sales. They add that first-time buyers are often at the lower end of the market and the tax credit is reducing the inventory of foreclosures.
Isakson, in a speech on the Senate floor this week, said lawmakers owed it to the country to extend "a proven program that works" and "buoy the marketplace."
He said that if the program is allowed to expire, the market again will depress values, sales and consumer confidence.
Senate Democratic leaders have not decided whether the homeowners' credit issue should be part of the unemployment bill. But there is powerful backing for taking it up in some form.
House Speaker Nancy Pelosi, D-Calif., said last week that she is looking into extending and expanding the popular tax credit, which according to IRS data has so far drawn more than 1.4 million applications from first-time homebuyers.
Senate Majority Harry Reid, D-Nev., last month joined Sens. Ben Cardin, D-Md., John Ensign, R-Nev., Debbie Stabenow, D-Mich., and Isakson in introducing a bill calling for a straight six-month extension of the tax credit.
The potential addition of the Isakson-Dodd proposal to the unemployment benefit bill would be a new element to a bill that the Senate is already trying to enlarge.
The House last month passed legislation to increase jobless benefits by 13 weeks, but only in those 27 states where the unemployment rate is at or above 8.5 percent.
That left lawmakers from the other 23 states unhappy, and last week Senate Democrats reached agreement on a bill that would give an additional 14 weeks of benefits in all 50 states, and another six weeks on top of that to those in states with the 8.5 percent unemployment rate. The national unemployment rate is 9.8 percent.
Currently, a laid-off worker in a high unemployment state is entitled to up to 79 weeks of state and federal assistance. The average payment is about $300 a week. Supporters of the extension say it is necessary in an economy where 15 million unemployed are competing for 3 million jobs.
from associated press (AP) – 3 days ago
WASHINGTON — Lawmakers are trying to extend and expand an $8,000 federal tax credit for first-time homebuyers, a stimulus-package tax break that many regard as a significant prop for the still-tottering economy.
The latest Senate proposal would drop the requirement that the credit be available only to first-time buyers, broadening the reach of the program but also adding to its cost, estimated by congressional analysts at $16.7 billion.
The backers of that idea, Sens. Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn., chairman of the Senate's banking committee, have suggested that their measure be attached to another pending bill aimed at throwing a lifeline to people hit by the recession, an extension of federal assistance to the millions in danger of exhausting unemployment insurance benefits.
While the White House says there will not be a second stimulus package following the $787 billion economy booster enacted last February, extending the homebuyers' credit and unemployment benefits are among several primary means being pushed by the administration or Congress to help people get through the prolonged economic downturn.
Others include continued subsidies for laid-off workers trying to keep their health insurance and a proposal by President Barack Obama to provide seniors and others with a $250 payment to make up for the lack of a Social Security cost of living increase next year.
The stimulus-package credit allows first-time homebuyers to reduce their federal income taxes by 10 percent of the price of a home, up to a maximum of $8,000. The credit, which could cost in the $12-15 billion range this year, is set to expire Dec. 1.
The Isakson-Dodd proposal would extend the credit to June 30, 2010. It would also remove the first-time homebuyer requirement and raise the eligibility income limit to $150,000, or $300,000 for a couple. That's double the current phase-out limits.
As with the Cash for Clunkers program for cars, skeptics have questioned whether the credit will have any long-term effect on the housing market.
Brookings Institution economist Ted Gayer wrote in a recent report that the tax credit is "very poorly targeted." He calculated that of the 2 million or more people who would make use of the credit if it were extended for a year and expanded to cover all buyers, only about 383,000 would be additional sales motivated by the credit. He estimated that the real cost of the credit would thus be more than $40,000, rather than $8,000, per buyer.
But believers say it has been instrumental in sustaining an economic recovery highly dependent on housing.
The National Association of Home Builders, the source of the 383,000 figure for increased home purchases, pointed out that this would also create more than 347,000 jobs, generate $16.1 billion in wages and salaries and $12.1 billion in business income.
"Homebuyers for the past two years have been sitting on the fence and we needed something to move them into the market," said Lucien Salvant, managing director for public affairs at the National Association of Realtors. With more foreclosures coming next year, "to knock the props out of the housing market at this point would not be a wise move."
The NAR, together with the NAHB and the Mortgage Bankers Association, have been running ads in the Washington area urging Congress to extend the homebuyer tax credit.
They note that home sales to first-time buyers have increased by 25 percent in 2009 and now account for 50 percent of all sales. They add that first-time buyers are often at the lower end of the market and the tax credit is reducing the inventory of foreclosures.
Isakson, in a speech on the Senate floor this week, said lawmakers owed it to the country to extend "a proven program that works" and "buoy the marketplace."
He said that if the program is allowed to expire, the market again will depress values, sales and consumer confidence.
Senate Democratic leaders have not decided whether the homeowners' credit issue should be part of the unemployment bill. But there is powerful backing for taking it up in some form.
House Speaker Nancy Pelosi, D-Calif., said last week that she is looking into extending and expanding the popular tax credit, which according to IRS data has so far drawn more than 1.4 million applications from first-time homebuyers.
Senate Majority Harry Reid, D-Nev., last month joined Sens. Ben Cardin, D-Md., John Ensign, R-Nev., Debbie Stabenow, D-Mich., and Isakson in introducing a bill calling for a straight six-month extension of the tax credit.
The potential addition of the Isakson-Dodd proposal to the unemployment benefit bill would be a new element to a bill that the Senate is already trying to enlarge.
The House last month passed legislation to increase jobless benefits by 13 weeks, but only in those 27 states where the unemployment rate is at or above 8.5 percent.
That left lawmakers from the other 23 states unhappy, and last week Senate Democrats reached agreement on a bill that would give an additional 14 weeks of benefits in all 50 states, and another six weeks on top of that to those in states with the 8.5 percent unemployment rate. The national unemployment rate is 9.8 percent.
Currently, a laid-off worker in a high unemployment state is entitled to up to 79 weeks of state and federal assistance. The average payment is about $300 a week. Supporters of the extension say it is necessary in an economy where 15 million unemployed are competing for 3 million jobs.
Tuesday, September 15, 2009
Clayton County Housing Authority Now has Down Payment Funds for Homebuyers!
This HUGE home is located in Clayton County! It is only $100 down and this home qualifies for the Clayton County Home Buyer Assistance Program for an additional $5,000 towards the purchase!!
Clayton County Homebuyer Assistance Program (CHAP)
Clayton County provides first-time, low and moderate-income homebuyers with downpayment assistance through its HOME Investment Program. Applying for these funds has been subcontracted to the Housing Authority of Jonesboro which will provide eligible homebuyers with a Deferred Payment Loan for up to $5,000. If the homebuyer loses or sells the house within the first 60 months after closing this money will have to be repaid to the County. If the homeowner retains the property for 5 full years, the downpayment assistance becomes a grant and does not have to be repaid.
Naturally, the home purchased, must be in Clayton County and the buyer will be required to obtain a fixed-rate mortgage from a reputable lender.
Income limits are 80% of HUD Area Median Income Limits. Borrower contribution is $500. Purchase price limit is $180,000. They can be reached at 770-478-7282
Home buyer education counseling is also a requirement and can be obtained through a HUD approved counseling agency.
Please contact me if you would like further assistance using this program!!
Monday, September 7, 2009
Atlanta Development Authority Down Payment Assistance Program
Downtown Living can be yours!
The Atlanta Development Authority has several Homebuyer Down-Payment Assistance Programs. The Beltline Affordable Housing Trust Fund, Atlanta Affordable Homeownership Program, Opportunity Down Payment Assistance Program, Vine City/ English Ave Trust Fund. For all of these programs the borrowers must qualify for a first mortgage in addition to down payment assistance, which is a second mortgage. The buyer qualifications vary from program to program. This is the information for the Atlanta Affordable Homeownership Program.
The ADA program provides the buyer with a down payment of up to $15,000 or 10% of the sales amount, which can be used as a down payment, and or pay up to 50% of the closing cost. There are no monthly payments required on the second mortgage. The maximum purchase price is $252.890. The qualifications for the buyer is as follows:
Buyer is a first time home buyer and has not owned a home within the past three years.
Buyer must purchase within the incorporated city limits of Atlanta. Within the CDIA area.
Homebuyer counseling is required throught a HUD certified agency. You can email me for a list of qulifying counseling programs. These programs are free.
The homebuyer must contribute $1,500 of their owne money toward the transaction. this can easily be accounted for by the earnest money, appraisal, home inspection.
The buyer can qualify for a Conventional, FHA, VA 30 year fixed rate loan.
The following income limits apply depending on the size of the household:
1 person $40,150
2 person $45,900
3 person $51,600
4 person $57,350
5 person $61,950
Properties that are eligible are: single family detached homes, townhomes and condominiums located within the city limits of Atlanta .
The loan is deferred for five years, repayment is due in full upon sale, transfer, refinancing or when the home is no longer owner-occupied. It remains as a "soft second" loan on the title of the property.
Please contact me for additional information and a list of participating lenders!
Thanks for reading!
Subscribe to:
Posts (Atom)
Rental Assistance in COVID -19 Resources for Renters and Homeowners!
There is still help for homeowners and renters! Please see the resources below that may assist you and your family in this difficult tim...
-
There is still help for homeowners and renters! Please see the resources below that may assist you and your family in this difficult tim... -
The Hardest Hit Fund Down Payment Assistance Program (HHF DPA) provides up to $15,000 in down payment assistance to eligible households pu... -
Downtown Living can be yours! The Atlanta Development Authority has several Homebuyer Down-Payment Assistance Programs. The Beltline Affor...