My New Blog

    Every now and then, things just get under my skin!  Those of you who know me realize that I'm all about fairness and when someone gets shafted...well it just doesn't set right with me.

    When a friend referred her son and his wife to me to buy their first home, I was so thankful!  I worked extra diligently and I truly feel as though I got them the very best deal possible.  The kind of deal that everyone walks away from after closing just KNOWING we all did the very best we can do! It gives us the warm fuzzies all over! 

    This same friend is divorced and her and ex hubby decided to the put the home and several acres on the market with a friend of "his" who is a Realtor. Yesterday she told me that the heating system is broken.  She said it was going to cost about $1,000 as it needs a new compressor.  When I told her to call her agent and ask him to call the warranty company to get it taken care of via the Seller's Home Warranty, she said she didn't have one!  When she asked her Realtor about it, he said he had never heard of that.

    To me, it is common sense to at least explain and offer a no cost home warranty to the seller upon listing a home.  This is only paid for when and if the home is sold.  It can cost about $500, but looks great to a potential buyer! This is not only a marketing tool to help the home SELL, (as it transfers to the buyer when sold and is no money out of pocket for the seller to put this into effect at listing time) it's also financial protection for the seller against unexpected expenses when one of the systems break down.

    If this agent didn't know about the Seller's Warranty...I'm very concerned what else does he not know about.  We aren't perfect as Realtors, but a good one makes sure you are protected against unforseen expenses every step of the way!  Get references! Be SURE you hire an experienced and competent listing agent. 

Yes, there is Free Mortgage Money!

I wouldn't have believed it if I didn't see it with my own eyes.  Did I hear correctly? You BET I did!  

The news rushed over me like a warm ocean breeze in the middle of the summer.  Hot flashes? No...it was the cold of winter on a January morning 2009.  Right in the middle of the worse recession in history, and I'm hearing the best news I had heard ALL YEAR.  Ok..yes...it is only January, but try to picture my "moment" as I sat there in my daydream with sand between my toes. 

Right there in City Hall...I was hearing correctly!

As a buyer's agent who holds as special place in my heart for first time home buyers in Wilmington, I'm always on a treasure hunt.  This was indeed a HUGE pot of gold for not only my buyers, but the Real Estate market in general. 

When the first time home buyers purchase...the seller get's to "move on up" and then before you know it...the large houses are selling again, or at least that is the way I hope it is going to work.

The program is the City HOP Program. HOP stands for Home Ownership Pool.  Based on income and credit qualifications, you may be able to obtain 100% financing and have between 30 to 40% of your mortgage payment interest free!  This is a fixed rate program and is NOT one of those loan programs that set a buyer up to fail. They even require that you take a home ownership class to make sure you understand al of the pros and cons to buying. 

Just to get a grip on this, the difference in payments on a $150K home with this program vs conventional programs is about $250 LESS per month!  HUGE DEAL!  Over 30 years especially!

The income limits are set to allows someone of "modest income" to purchase a home.  The "modest income" ranges from as low as $31,000-$47,000 per year for an individual to as high as $75,000 if you are a dual income family.  Income limits are set based upon size of your household.   The limit on the price of the home that can be purchased is around $200,000 and of course you must live within the city limits of Wilmington.  It is a CITY program, so  that makes sense. 

Of course, if you prefer to live in the county, or even across the bridge in Leland, there is another 100% financing...but you do have to pay interest on the loan.  It is the USDA program.

So if you have been sitting on the fence about buying your first home. Give me a call today...I'VE GOT GREAT NEWS!   And as an ADDED Bonus...our President just signed the bill on the new $8,000 tax credit for first time home buyers or buyers that haven't owned in the last 3 years!

So even if you didn't get that "stimulus" check that you were hoping for...there is still a way to get your economy stimulated!  Take advantage of plenty of homes to choose from while the prices are still low and interest rates are the lowest in years. 

My prediction is that 2009 will be the year of the FIRST HOME BUYER!

Sunday, February 1, 2009

WHAT IF? There IS a Way to Prevent Foreclosures

Short Sales and Foreclosures? I'm ready for a SOLUTION!




I don't profess to know it all...in fact...on a daily basis I realize that the more I know, the more I need to know! So I'll start there, and I only ask that you do so as well. Let's keep our mind open to "possibilities" for the sake of discussion.

What I DO know (and it echo's daily) is that the present state of the economy leaves much to be desired. It's NOT working!



Everyone is grabbing at straws in this unprecedented situation that we all face. So let's just agree for a few minutes that everything has NOT been tried and tested. And what has...leaves room for improvement. The banks keep asking for more BAILOUT MONEY...and it's because they have NO IDEA what losses they will face in the foreclosure market. A house with a good mortgage is a "performing asset" to the bank. When no payments are being made it is of course a "non performing" asset. The banks have NO IDEA what losses they face because they don't know when the non performing asset will be off of their books.



So this financial crisis that the banks/homeowners are in...is my entire point. Bare with me here...

Let's talk housing crisis. Not everyone who is facing foreclosure bought a home KNOWING they couldn't afford it if the rates went up on the adjustable mortgage! They bought a home in good faith with a payment they could afford at the time. Many lost jobs or businesses and simply can't make the payment on what they receive on unemployment. God help them if they happened to be one of the individual self employed. You know them! The plumber, the insurance salesman, or yes...even The Realtor. The ones who don't qualify for unemployment and don't show up in the "statistics".



Supply vs. Demand is as much a victim as a culprit in the demise of a strong housing market. But even if no one takes the blame, the effect has been a loss in equity of as much as 30%.
So with no job and no equity, how is someone going to refinance to get the lower interest rates that our recently infused banks are willing to lend? It's NOT possible!

RESULT? Just when you thought you were in good hands..."Welcome Home...now comes the foreclosure"

So here come the "groups of investors" in record numbers to buy up the bargains! They offer the bank (via the distressed seller facing foreclosure) 50% to 65% of the listing price or mortgage balance, whichever is lower. Oh...and I forgot to mention...it can take the bank up to SEVEN...YES I SAID SEVEN MONTHS to approve a short sale!

I have a suggestion that I believe would drastically reduce the number of foreclosures, get the seller out of their home when they owe more than the home is worth...stop the slide in existing home prices...and limit the amount of loss that each bank or mortgage company has to absorb from each "non performing asset".

Banks--Rather than foreclose or take 7 months to approve a short sale for a new buyer consider the following: Make the loan assumable at a new interest rate. Go ahead...bite the bullet...agree and take a flat 20% loss on the principle.

Downpayment--Forget that! The bank shouldn't require that. Let the buyer use that money (5%) to buy furniture, upgrade the house (I'm thinking to help save jobs here)...or keep it in reserves for "a rainy day" in the event of a layoff. Yes...even an "owner maintained" reserve account where the owner earns interest wouldn't be a bad idea.

Results??

• Quick sale for distressed sellers to get out of payments they cannot afford and move on with their life
• No foreclosure cost to bank
• Bank has pre-set loss known in advance and subsequently turns non performing asset into performing asset with new owner
• Stops "investor groups" from getting homes at 50% of mortgage balance
• Prevents further slide in home market prices
• Prevents short sales from having open ended time lines
• Prevents sellers from losing buyers due to long wait on short sales

My suggestion is just that...a suggestion for a solution to end the "stand off" on short sales and the ridiculous drop in appraisal values of the homes still left in the neighborhood after it has experienced several of these short sales. Not to mention the agony of the wait for a family who only wants to start over.

This is my solution...what's YOURS?