Real Estate Blog

The following post comes from an article by Alison Rogers in Time Moneyland online and is a great summary of the ins and outs of the loan pre-approval process.

If you are interested in buying a home, chances are you need a mortgage — and the first step toward a mortgage is a prequalification (or its cousin, pre-approval) letter. You provide your lender with basic financial information, and in return you receive a written offer to provide you with financial backing for a home purchase.

However, buyers — and especially first-time buyers — should know that having a letter in their pocket isn’t everything. In fact, according to statistics kept by the National Association of Realtors, some 16% of realtors recently reported that deals that they had signed contracts on didn’t close.

5 Signs That You’re Borrowing Too Much
Here are five things to keep in mind even once you have your pre-qual in hand:

1. A pre-qualification letter is a vote of confidence, not a guarantee of financing. That’s why, as a real estate agent, I always advise buyers to put a mortgage contingency clause in their contracts, giving them the right to back out of a deal if their financing doesn’t work out.
2. A pre-qual is only as good as your mortgage lender’s (or mortgage broker’s) questions. For example, say you’ve told your lender over the phone that your income is X, but forgot to mention that some of that was bonus. When it comes time to underwrite the loan, the bank might give you full credit for that bonus, discount the bonus, or refuse to give you any credit for the bonus at all. The same holds true for, say, income you make from a rental property. So even though your broker or banker might be asking you tough, detailed questions, remember that the point is to uncover hot spots now, and avoid an eventual turndown later.
3. A pre-qualification is a vote of confidence in you, not your target property. “I always write on the bottom of my pre-qualifications “subject to project approval,” says David Breitsein of Apple Mortgage Corp., a New York-based mortgage broker who works with multiple banks. Factors that might stop you from getting your target property include too much investor concentration (it’s tough to resell a mortgage in an apartment building if any one investor owns more than 10% of the building), to much lender concentration (banks don’t want to risk lending to too high a percentage of the building) and lack of documentation (a new house might not have a required certificate of occupancy).
4. The more specific a pre-approval letter is, the more likely it will impress the seller. In her excellent mortgage book Homeowners Beware, industry insider Carolyn Warren shows a rewrite of a pre-approval letter. The first draft says, “This approval is for an FHA, 30-year, fixed-rate loan.” The final (and stronger) draft says, “The terms of the 30-year, fixed rate FHA loan are as follows…” and then goes on to detail not only the purchase price, but also the buyer’s down payment. Remember that your mortgage banker or broker is getting paid to make this loan, so it’s OK to ask them to help you generate a strong letter.
5. Your target property has to appraise at or near the price you’ve contracted to pay for it. Let’s walk through an example: Say the bank is willing to lend you 80% of a property’s value, and you have a down payment of $100,000 ready to go. That all works out fine if you find a property worth $500,000. But if the bank’s appraiser thinks that property is worth merely $400,000 – they’re only going to lend you 80% of that, or $320,000, leaving you $80,000 short of where you want to be. Your options at this point are to try and make a new deal with the seller, or to bring a lot more cash to the closing table.

Find the whole article here: http://moneyland.time.com/2011/12/14/homebuyers-dont-get-sunk-early-in-the-mortgage-process/

As some of you may have heard, we have a new assistant in the office–and yes, she is my daughter! As a recent graduate of the Masters of Creative Writing program at the University of California, Davis, she will be putting her writing skills to work in developing ads and blogs, exploring social media and marketing, and will be available to help you through every step of the buying and/or selling process. My assistant of over ten years has left Re/Max to pursue other opportunities. We are sad to see Kris go but are extremely grateful for her many years of hard work and wish her all the best in her future endeavors!

I was reading this article this morning and find it to be very true for the most part. However, this fall has been extremely busy for me. Typically I can expect for things to settle down and for life to get a little bit slower after spring, which is so busy we sometimes bustle through the day and forget to eat lunch. But in October, we sold about six homes in a two week time period and it was just as hectic as spring. Interest rates are incredibly low and inventory is down, so buyers have less to choose from and this of course means less competition for sellers.

The rest of this post is provided largely by brokeroutpost.com but gives a great explanation for the usual patterns of the seasonal real estate market.
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The time of year you buy your house can affect pricing a great deal. In some states real estate sales slow down in the winter months and sellers will be more open to offers they may not have considered in the spring or summer markets.
In most real estate markets, the summer is the time most people will purchase a new home. This means that the sellers can increase prices a little, and be less willing to give you closing costs credits. Sometimes your situation will not let you choose what time of year you want to purchase your home, and in those case you may have to bite the bullet and purchase when the market is hot.

In the state of California for example. November and December tend to be the slowest two months of the year for real estate. Durring these months, buyers have more leverage than usual, and can ask the seller to come off the asking price by a larger amount and have a greater chance of the offer being accepted.
Keep in mind that when you are trying to figure out when the best time of year to sell your home that most of you will be buying a new home and taking out a mortgage on that property. If you decide to wait 6 months until the time of the year is usually better for your specific area then mortgage interest rates will change during this time you wait also. Interest rates have been on the rise and there is always the chance that you may end up having to accept a much higher interest rate by waiting to sell your home. So making an extra 5 or 10k from the sale of your home and accepting an interest rate that is considerably higher because you waited to put your home on the market may end up costing you more in the long run.

There are advantages and disadvantages to buying either when the market is hot or when it is slow. While you may get better deals during the slow months, you will also have less selection (less homes for sale). In a hot market you may be more likely to get into a bidding match with another buyer, but there is also a much greater selection; if you lose that house there will be more like it available.
May thru July are often popular times to get a home as people are using tax refund money towards down payments or closing costs. In the northern climates you will probably find the best deal in the winter months.

Typically the average house price falls during the months of October through March and the largest price increases are made in Spring and Summer. Depending on the local market you could save as much as 7% to 10% by purchasing in January when most people are not shopping for a home.

DISCLAIMER: The information contained in this article on ‘Whats the best time of year to buy a house’ is a collection of contributions by licensed mortgage professionals. Always consult a licensed professional before applying for a mortgage.

Good curb appeal is a major plus when it comes to marketing a home. A little bit of work on the front of your home can pay big dividends.

When a potential buyer pulls up in front of your house, their first impression is absolutely crucial. Sometimes buyers won’t even look at a home with droopy shutters, sagging gutters, peeling paint and a bumper crop of dandelions in the front yard. Or they might go in expecting to find a “fixer-upper” that could be purchased at a bargain price. If a house looks neat and cared for from the street, the initial good impression will carry over as the buyers step inside. It is not necessary to hire a professional landscaper, but listen to your real estate agent’s suggestions when you list your home. Local nurseries can help you select blooming plants that will thrive in your area. Keep the lawn mowed, and regardless of the season, take care of exterior maintenance. Strong curb appeal will help your home sell more quickly and for top dollar. As one of America’s #1 Real Estate Experts™ I can help you with your real estate needs. Please call me at 888-736-2917, or email me.

Are you aware that you can purchase a home with no money down through Mayo Employees Credit Union?  Mortgage insurance is not required for this loan, and  payments are based on a 30-year amortization with a 7-year balloon.  Interest rate is currently at 5.625%.  If you have a 5% down payment, the rate will drop to 5.375%.  They’ll even ignore your student loan debt in qualifying you for this loan.  Please let me know if you have any questions!

There’s no doubt about it–the kitchen is one of the most important rooms in the whole house for many prospective buyers. Smart sellers will take a close look at how they can make their kitchen a real asset when it is time to sell.

Your kitchen doesn’t need to be state-of-the-art to be attractive. The first step toward enhancing your kitchen’s appeal is a thorough cleaning. This includes the walls, cabinets (inside and out), floors, and appliances. Keep the counter tops as clear as possible of small appliances and gadgets. Consider low-cost improvements which can make a big difference, such as a coat of paint, fresh wallpaper, or new floor covering. Be sure to keep the kitchen sparkling when the house is being shown. This means no dirty dishes in the sink or moldy cucumbers in the refrigerator. This extra effort will pay great dividends! As one of America’s #1 Real Estate Experts™ I can help you with your real estate needs. Please call me at 888-736-2917, or email me.

Figures were out through the Minnesota Association of Realtors and statewide sales were up in December. Closed sales were up in December 11.4%.

Looking for a neutral paint color? Try Benjamin Moore’s (found at Hirschfield’s Decorating Center) Bleeker Beige!

http://www.youtube.com/watch?v=Q-xn_mUn0Fs

INSIDE

CLEAN! CLEAN! – Have the carpet shampooed; wax the floors, wash the walls, windows, blinds, drapes and lighting fixtures. Consider engaging a cleaning service, recognizing that it is a justified moving expense.

KITCHEN AND BATHROOMS –

Clear off counter tops. Leave your canisters and little else. Maximize the available counter space. These rooms should be gleaming. If unsightly, have the tub re-caulked and remove mineral deposits and grime from the shower walls. Clean the stove, microwave and refrigerator.

PRIMARY STORAGE AREA – like the garage, its time has come to be liberated. Remember, you can do it now and benefit with a more attractive home on the market, or you can do it several months from now, in the process of moving when there is no advantage. Do it now.

REPAIRS – Identify and repair dripping faucets, sticking or creaking doors, etc.

When people see areas of disrepair they begin to wonder whether there may be other unseen problems.

CLOSETS – Remove out of season clothing. Organize your clothing and the shoes on the floor. Remove all clutter from cabinets and closets.

FURNITURE – The less furniture, the larger a room appears to be.

A LIGHT APPEARANCE – As a rule, do everything to lighten the appearance of the home. Raise the blinds, open the drapes and use light colors. Repaint any room beginning to look shabby.

OUTSIDE

Walk the property with a pad and pencil. List anything that you think is less than satisfactory without regard to cost or time. You can review the list afterwards to determine what you can and can’t repair.

THE HOUSE – Take a close look as you walk the property. Clean anything that looks unkempt or dirty; repair or replace anything that looks loose, dingy, rusted or broken. Make sure the door bell works. Replace a tired-looking mailbox; clean the exterior light fixtures and wash the windows. Try to spot hanging or rusty gutters, crooked antenna, loose shingles or shutters.

THE YARD – Turn and weed the beds; trim the trees and shrubs. Lay in ground cover. Mend the fence, fix the gate latch. Pick up litter. Consider a landscaping/lawn service.

OUTDOOR FURNITURE

– Examine and spot paint your out door furniture. If it’s rusty or un-repairable consider disposing of the pieces.

FRONT ENTRY – It’s the first thing our buyers see as they stand and wait for the door to open. It’s worth the extra effort to spruce it up.

THE GARAGE – The time has come. Discard virtually everything in the garage that hasn’t been used for a year. Wash it down.

NOTE: Think in terms of a home that is sparkling clean and uncluttered.