In The Newstag:jodyzinkrealtor.com,2008:/news//32008-02-11T05:08:25ZMovable Type 3.35Beware of Potential Pitfallstag:jodyzinkrealtor.com,2008:/news//3.872008-02-09T04:59:19Z2008-02-11T05:08:25ZUnless you live in a cave, you might have heard about homes going into foreclosure in record numbers. As a result, I continue to receive calls from clients--namely investors, many of whom flip or rent real estate for a living,...
Unless you live in a cave, you might have heard about homes going into foreclosure in record numbers. As a result, I continue to receive calls from clients--namely investors, many of whom flip or rent real estate for a living, looking for bargains. Some of my callers, however, are beginners--and are quite honest about asking for help when starting out. This article is especially for them.
If you've decided to give real estate investing a try and you're financially prepared, know that if you're going to purchase a HUD or bank-owned property, you'll need to show a letter of lender pre-approval or proof of cash funds up front. This is a good idea so you know what you can afford. A seller will want to see it, plus it strengthens your offer. Your Realtor can help if you're not sure where to start.
Once you've got the pre-approval, it's time to browse. Spotting the right property can take time, but--and this is important, sometimes it doesn't. Don't dismiss a potentially good deal because you don't feel you've been searching long enough. Work the numbers. Ask your Realtor to advise you. He or she can also check the market's pulse by comparing other similar properties recently sold giving you more information to make a good decision on whether to pounce.
Let's say you decide to have your Realtor write an offer on a bank-owned property. In most cases, the seller (bank) is given a deadline to respond. Here is a common pitfall: Bank does not respond in a timely manner. While this can infuriate an honest to goodness buyer, it's important to know, this is not uncommon. Banks are notorious for this. One reason it takes so long for lenders to respond to an offer is because of bank's bureaucratic nature. There are many layers before getting to the decision maker. Plus, if the bank has outsourced this whole process to an asset management company, there's another layer of red tape. Add to this the hundreds of already foreclosed homes the bank is trying to sell and you can imagine the piles of files on someone's desk.
I've seen a seller respond as quickly as within an hour. I've seen sellers take a month. Patience during this time will serve a buyer especially well.
Once the seller does respond and an agreement is reached, expect a bunch of paperwork. That's because almost all seller/lenders insist on certain addenda to the purchase contract that must be signed and submitted---often before the seller will even sign the contract.
Also, under Ohio's Statute of Frauds, the lender--like any seller, isn't bound by the purchase agreement until they've signed it. That's important to know so that a buyer isn't caught off guard when a lender revokes a verbal deal after weeks of negotiation because they've received a higher offer from another buyer.
Despite some of the bumps, real estate is considered one of the safest long-term investments. We know, there are no guarantees, but historically--the world's wealthiest people--typically aren't renters. Real estate ownership adds net worth.
Now to take advantage of one of the greatest long-term wealth-building vehicles, you have to be in the market. Some are waiting for the market to hit bottom. My opinion? With interest rates at historic lows and prices in decline, you might have already missed the best day to buy.
Toledo is the silver liningtag:jodyzinkrealtor.com,2008:/news//3.862008-01-26T04:32:58Z2008-01-28T04:37:47ZI just returned from a week-long San Francisco getaway. Highlights from the trip include taking some great photos of the sights, holding and touching the newly unveiled Macbook Air computer, and driving around looking at real estate. Expensive is the...
I just returned from a week-long San Francisco getaway. Highlights from the trip include taking some great photos of the sights, holding and touching the newly unveiled Macbook Air computer, and driving around looking at real estate.
Expensive is the first word that comes to mind when I think of San Francisco real estate. And expensive it is. We saw some gorgeous, multi-million dollar estates with great views that anyone would love to own. But what's really interesting are the average-looking homes. Like the ones you'd see at the opening of the 80's sitcom, Full House. Those seemingly "average"homes could easily go for a half-million dollars. Browsing through San Fran's "Real Estate Times" I'm hard pressed to find anything under $300,000--and the average asking price at a glance is about $1 million.
In real estate, of course we know that the asking price and the sales price can be two very different things. One of the headlines I stumbled upon while visiting spouted that the median sales prices of homes in California had plummeted to just over $400,000.
Now, amid the negative news you may have heard or read surrounding real estate and the economy, I'd like to put some things in perspective.
Seeing what $400,000 could buy in San Francisco, I'm thrilled with my modest West Toledo home. Truly! It's affordable, and without big-city crime, traffic and pollution.
It's true, home prices have gone down in several areas. My translated view? Affordability could not be better. Especially for first-timers. A buyer with a good credit score and a good job who can afford a good down payment and document everything is in the driver's seat. This isn't music to sellers' ears, but consider that loss can be made up on the buying side. If you don't have to sell right now, don't. Not everyone needs to or wants to.
The cost of borrowing money is just as affordable. Who could complain about a 30-year fixed-rate mortgage with an interest rate of less than 6 percent? Or a 5 percent 15-year mortgage? Plus, home buyers who can't afford a down payment of 20% can now deduct mortgage insurance premiums on their taxes.
It's true, many homeowners took on big, complicated mortgages they couldn't afford, but there are alternatives to foreclosure. Talking with creditors and modifying the loan can help borrowers hang on. Short sales can save a borrower from foreclosure—and a new law even saves them from paying taxes on that forgiven mortgage debt. This is a huge win for homeowners.
Buyers are out there. Every day---somewhere, property is transferred to someone else. People are still getting married, relocating, dying and being born. They are moving up, down-sizing and building. They're coming and they're going. Realtor's meet them every day.
So, as I sift through the real estate inventory here in Toledo, I'm not likely to find a home where the TV characters of Mary Kate and Ashley once lived, nor do I necessarily want to. I do, however, believe there are some Californians in their cars right now, perhaps sitting in traffic, who would welcome the fresh air and affordable housing that Toledo, Ohio has to offer.
This year, write it downtag:jodyzinkrealtor.com,2007:/news//3.852007-12-29T04:06:15Z2008-01-28T04:26:06ZAnother new year, another new list. But this time it's different. I'm writing it down and I really mean it. Experts say writing things down helps you to achieve your goals. So here goes. I have three simple objectives for...
Another new year, another new list. But this time it's different. I'm writing it down and I really mean it. Experts say writing things down helps you to achieve your goals. So here goes.
I have three simple objectives for 2008. I resolve to lose a little weight, be more knowledgeable, efficient and productive for my real estate clients, and be a better person.
Health-wise, I'm going to eat more fruits and vegetables. I vow to drink more water and walk my real estate beat at least twice a week.
To do a better job for my clients, I'm going to use all the tools at my disposal. Translation: I'll be more high-tech this year. In '08, I'm going paperless. Okay, maybe not completely paperless, but pretty close. I'm doing most everything electronically nowadays: my calendar, my to-do lists, and maybe even all real estate contracts by year's end.
I'm listening to more podcasts these days, too. These Internet audio programs cover an almost unlimited range of topics and are easily downloaded to my iPod so I can listen while walking (with my water bottle) my real estate beat. I'll be a picture of productivity in '08. Just you wait. In fact, by the time most people know what podcasts ARE, I'll have done one of my very own. (Since it's in writing, I'll have to do it now.)
I've learned a lot from podcasts: everything from the latest real estate trends and tips, to Andy Rooney's take on things. I've even learned how to back up my hard drive.
More on the Be a Better Person part. I'd like to think I'm a *pretty* good person, but we all could stand some improvement, particularly on the road. Since I'm already a good driver, I'm going to do better at having a clean car. After all, Realtors are always supposed to have a clean car. I've already bought a stash of car wash gift cards from Costco to have on hand and cleaned out the candy wrappers from under the driver's seat.
So those are my resolutions. In writing and published for the world to see. And this new year, I mean it.
Three words Grandpa left behindtag:jodyzinkrealtor.com,2007:/news//3.832007-12-14T07:23:38Z2007-12-19T07:29:38ZOne of my earliest childhood memories is going with Mom and Dad to visit my Grandpa at the bank in Paulding, Ohio. I was much too young to know what it was all about, but as a 3-year old, I...
One of my earliest childhood memories is going with Mom and Dad to visit my Grandpa at the bank in Paulding, Ohio. I was much too young to know what it was all about, but as a 3-year old, I had ulterior motives. Just for showing up I knew I'd receive a DumDum sucker; get to sit on the plush, oversized leather chairs--and best of all, get to see the big vault where the money was kept.
While I patiently waited to see the vault, the grown-ups would talk and I would explore Grandpa's office. I remember photos of him sitting at the head of conference tables, shaking hands with other businessmen and signing papers. I was curious. It all looked very important. I wanted to be important, too.
As I got older, I learned Grandpa wasn't afraid of anything. His business endeavors included buying and selling all types of real estate, building more than 500 new homes in and around Paulding County, and developing subdivisions. He raised honeybees. He owned Noneman Lumber Company. He hauled coal, raised livestock and farmed. He and Grandma Violet together operated a hotel and restaurant. From 1973 to 1979 he was chairman and chief executive officer of the National Bank of Paulding and was also president of Utility Center, Inc. of Fort Wayne. I learned that when Grandpa spoke, people listened. I wish he'd written a book.
Grandpa was passionate about business. He loved commerce. The wheels inside his mind were always turning, searching for ways to solve problems. At age 90, he owned an Apple computer and would log on to AOL to check the markets. Occasionally I'd see him logged on and would send him an instant message telling him I loved him. Grandpa wasn't the type to express emotion, nor was he especially computer proficient, so I didn't necessarily expect a response. I'd sit there at my desk and wait awhile, but eventually leave the room and go about my day. That night I'd find a message that warmed my heart and always made me smile. It usually said something like, "stocks done good today, bye."
Grandpa died Saturday, December 1, 2007. Since then, I've learned things about him I never knew: While in the army, he held keys to the warehouse and offered beer to German POWs. He was a card carrying member of the NAACP. In 1935, he was the only kid in his class whose family could not afford to buy him a suit for graduation.
Jim Noneman accomplished quite a lot in his 90 years, but he was never one to boast. The simple things gave him the most pleasure: Mowing grass on his riding lawn mower. Growing tomatoes. Making microwave popcorn. And sitting on the front porch.
Compassionate, gentle and independent, Grandpa was a quiet strength. One thing he'd always say, "Hang in there." Whether it was getting through the latest slump in the real estate market, or just being affectionate, he'd say it to you, "Hang in there." I think it was his special way of saying, "I love you."
A New Sign for Sellerstag:jodyzinkrealtor.com,2007:/news//3.822007-11-30T13:42:42Z2007-11-30T14:04:16ZFor months, the For Sale sign weathers the elements near the street and goes it alone. That is, until there's a new kid sharing the lawn. You may have seen the For Sale sign meeting his new friend: the For...
For months, the For Sale sign weathers the elements near the street and goes it alone. That is, until there's a new kid sharing the lawn. You may have seen the For Sale sign meeting his new friend: the For Rent sign.
Homeowners who've moved up or out of town are still trying to sell. They never really set out to be landlords, but out of necessity are forced to find a way to generate enough money to carry their costs. So instead of sitting on a vacant house, sellers—often reluctantly, are trying to generate rental income until a market turnaround.
The decision on whether to turn a property into a rental is worth taking a hard, hard look at. Find the wrong tenants and you could wind up with a larger problem than when you started. Plus, you're taking it off the market. Is it worth losing that marketing time? If it doesn't rent right away, you're still paying taxes, utilities and insurance. Re-evaluating the marketing plan, cutting the price and moving it now may serve you better long term.
However, once it's decided that renting is the way to go, the accidental landlord must make more decisions. Do I hire a property manager? What should I charge for rent? Who is the right tenant? Where do I find him? A Realtor can help you with this. Also, be clear to prospective tenants you plan to sell the house. Try keeping them until the property is sold, that way if the sale isn't completed, you won't need to find new renters. You might offer an incentive such as paying a portion of moving expenses or lowering the rent when putting the house back on the market.
Consider checking credit and background. Once you've got the right applicant, get the lease in writing even if your tenant is a close friend or family member. It can be a simple month to month agreement. You're entering a business relationship and this way everyone is clear on the terms. What about pets? Smokers? Spell it out. Both parties have responsibilities. If the unexpected happens, having a definite agreement can be very important.
Don't forget about Uncle Sam. For the best tax benefit, you want the landlord stint to last no more than three years. After that, you'll have to pay a capital gains tax on the home's profit since you bought it. If that happens, you could end up paying more to the government than you gained by renting. On the other hand, if you live in your home for two of the five years before you sell, you pay no taxes on up to a half million in profits if you're married, $250,000 for singles.
Being a landlord requires serious commitment and setting yourself up to win from the very beginning is crucial. It's likely the ranks of accidental, hesitant landlords will grow, as many sellers hold out for acceptable prices.
Intermodal Matterstag:jodyzinkrealtor.com,2007:/news//3.812007-11-16T05:42:43Z2007-11-17T05:44:55ZImagine looking down on planet earth from outer space, zeroing in on North America. Take note of the highways, railroads and waterways. I-75 and I-80 span the entire nation in all directions. Three of North America's largest railroads operate at...
Imagine looking down on planet earth from outer space, zeroing in on North America. Take note of the highways, railroads and waterways. I-75 and I-80 span the entire nation in all directions. Three of North America's largest railroads operate at our doorstep: Canadian National, Norfolk Southern and CSX. The Great Lakes provide a source of fresh water at a time when some parts of our country are pretty thirsty. And
of course, there's the airports.
The busiest intersection of the entire continent is Toledo, Ohio.
Toledo has what no one else does. It was the heart of conversation at last Thursday's networking night sponsored by the Toledo Home Builders Association. By the time I scrambled to get there, it was standing room only.
Nearly 200 people showed, including developers, builders, politicians,lenders and many others with a stake in our area's prosperity.
Brian McMahon of Danberry National took the mic for a while, sharing some insight from his research, which points to Toledo as an ideal spot for an intermodal hub.
Intermodal? The term isn't one that I've used much (or ever). So I looked it up. Intermodal: involving transportation by more than one form of carrier during a single journey. Ah, I get it. Sort of like run, bike, swim.
Draw a 300-mile radius around Toledo. Within the Lake Erie West Region, more than 4 billion square feet of industrial space is accessible. That's more than Chicago, according to McMahon's statistical data. Over 30 percent of industrial space in the U.S. and 54 percent of Canadian industrial space can be accessed within a round-trip, one day drive. And fewer days and hours in transit saves companies time and money.
McMahon says, "Where else in North America can a business get these kinds of demographics? We have something no one else has.
With regards to warehousing and logistics, we've got the most bang for the business buck. Understanding it ourselves plays a big role in enhancing our self image. Toledo's at the intersection. Right there on the corner. Not Cincinnati. Not Cleveland. And there's no deep water port to Columbus.
I think we all agree, everyone here wants to help create a Lake Erie West success story. As a Realtor, I have a sincere interest in people knowing the truth about our region. We have a lot going for us here. Local development groups are pounding the pavement to tell our story around the world, but sometimes the people who actually live here don't follow their lead. The next time someone asks you what's going on in Toledo, take the opportunity to spread some good news. Just tell them the truth.
And if you really want to impress them, drop the word intermodal in your conversation a few times.
Wildfire Question: Am I Covered?tag:jodyzinkrealtor.com,2007:/news//3.802007-11-02T13:30:29Z2007-11-01T12:05:49ZWith over a half-million people displaced by fire in southern California, even more than that are begging the question, am I covered? Something worse than losing your home is not having enough insurance to replace it. We always think it...
With over a half-million people displaced by fire in southern California, even more than that are begging the question, am I covered? Something worse than losing your home is not having enough insurance to replace it.
We always think it won't happen to us. And most of the time, I think we're right. Lake
Erie isn't due for any tsunami activity, but floods can happen. Tornado season is pretty much wrapped up as well, but two of my friends in Pensacola, Florida took cover just 2 weeks ago. We're not prone to wildfire in these parts, but arsonists are out there.
Insurance is meant to help pick up the pieces when faced with disaster. Policyholders
sometimes learn too late that there's not enough coverage to return to their previous
lifestyle. Here's an opportunity to learn from someone else's mistakes and a prompt to review your policy.
Make sure you have the right kind of coverage. Companies can deny claims based on what caused the damage. Homeowner's insurance would cover wind blowing the house down, or rain coming through a collapsed roof, but many Katrina victims were denied because they didn't have special flood insurance. If your home suffered a sewer or drain backup this weekend, would you be covered?
You've heard it before, but probably haven't done it. Take inventory. Take photos of your home and its contents and put them in a safe place away from your home and someplace you'll remember! Maybe email them to yourself or keep them at work.
If your home is ever destroyed, you'll want to be able to rebuild it to its original
condition. This may cost significantly more than its value on the open market.
Homeowners have to specifically ask for a ?guaranteed replacement policy,? otherwise
insurers many only issue an extended replacement policy which sets payout limits plus an extended 20 to 25 percent of additional payout. This likely wouldn't be enough to cover rebuilding costs.
A standard policy will likely insure your things at actual cash value. That's the value
of an item at the time of loss. To be sure you can fully replace lost or stolen items,
you may want to add an endorsement for replacement cost coverage, which would replace the item with one of similar make and model, regardless of the actual cash value. It may cost you a bit more. The term again: replacement coverage. Don't assume you already have it. Many people think they do. Some learn they don't until after tragedy has struck.
Take the time to call your insurance agent. I've stressed in previous columns how
important it is to work with your Realtor as a partner in achieving you real estate
goals. Working with your insurance agent is just as crucial. He or she is an expert and can explain whether you have enough coverage and the right kind.
Steps you take now could make all the difference. In case disaster strikes, give
yourself the best chance to recover.
Creative Moneymaking, or is ittag:jodyzinkrealtor.com,2007:/news//3.792007-10-19T16:11:21Z2007-10-21T16:17:43ZThe "fix and flip", "no money down" and "rent to own." While not for the timid investor, or those allergic to hard work, people are making money with these "creative" real estate strategies. I can appreciate creative ways to make...
The "fix and flip", "no money down" and "rent to own." While not for the timid investor, or those allergic to hard work, people are making money with these "creative" real estate strategies.
I can appreciate creative ways to make money. We all do. Back in college, students in the psychology department at Indiana University were always posting signs around campus recruiting students for studies and experiments. I was all for making a little extra cash, and it mostly consisted of questionaires, puzzles and staring at ink-blots. As long as I wasn't shocked or probed in any way, this guinea pig cheerfully signed up. After several weeks, I received a small stipend, felt good about helping science, and went on my merry way.
A better story, however, takes place in my West Toledo neighborhood. That's where a special family has earned thousands of dollars, sent a kid to college and is working on sending two more. Since 1989, these family members have collected aluminum cans. Not long after moving into my home, I got a note on my doorstep wrapped in a neatly rolled up garbage bag asking me to leave my cans for them one day a week. I was thrilled to help. From that point on, not a single can from my house has gone to the Toledo curb recycling bin, but instead to the special bag just inside my front door specially dedicated for this family's efforts. And since they get more money for uncrushed cans, I leave them as they are. I set them out one day each week. Walk up the sidewalk on can day and it's obvious my drink of choice is Diet Pepsi. Go down the street and I can tell what my neighbors like to drink, too. Door after door, I see bags of aluminum cans. It gives me a good feeling to see that many of my neighbors appear to be on board. We come home at the end of the day, the cans are gone, and another neatly wrapped garbage bag is left behind for the following week.
It's can be easy to forget that making money and being financially independent doesn't mean reinventing the wheel. Consistency and focus got this family pretty far. For 18 years, they've focused on only 12 streets.
I'd be remiss not to mention another group I often see. Perhaps you've seen them, too. Those metal scrappers you see every week just before garbage day? They're consistent. Coverage you can count on. Just try it. Drag an old kitchen appliance to your curb and it will likely be gone in an hour. While you're at it, throw in your old wire, pipes and other scrap metal lying around the house. They'll love you for it. Just hope you don't get stuck behind their truck on I-475 when they hit a pothole.
Whether you're staring at optical illusions for a psych researcher, brokering a million dollar real estate deal, or collecting metal in the neighborhood, the qualities of persistence, commitment and creativity provide the foundation for future success.
7 Steps to a Higher Credit Scoretag:jodyzinkrealtor.com,2007:/news//3.782007-10-05T22:38:55Z2007-10-05T22:59:55ZLiving within your means is one of those things my parents and grandparents have drilled into me. "Ask yourself if you really need it," they say. I'll stand there with my shopping cart at my favorite neighborhood Target (or Costco)...
Living within your means is one of those things my parents and grandparents have drilled into me. "Ask yourself if you really need it," they say. I'll stand there with my shopping cart at my favorite neighborhood Target (or Costco) and think awhile. And I usually decide that I don't need whatever it is I'm pondering upon. Now, I certainly have my weak moments. Like the plush, fluffy socks I bought this weekend. An impulse buy for sure. I justify it because they were on sale. Granted, buying a plush pair of socks doesn't put one into bankruptcy, but habits over time really do add up.
Credit scores, together with your overall debt and income, play a big role in determining if you'll qualify for a loan and under which terms. In addition to some good old fashion discipline, here are some ways to improve your numbers.
1. Know what's on your credit report. Go to AnnualCreditReport.com. Every 12 months you can request a FREE report from each of the big three credit reporting agencies: Equifax, Experian and TransUnion. Check for and correct any errors. A bankruptcy filed by Jack E. Frost can wind up on Jaque K. Frost's record by mistake. It happens. Make sure you're not paying for someone else's poor financial management.
2. Shop for mortgage rates all at once. Lots of inquiries and applications can lower your score, but they're only counted as one inquiry if they're submitted over a short time frame by the same type of lender.
3. Eat in and cook more. Wow - eating out adds up fast. I'm guilty. After some thought, I realized I could cut my bill by 50 percent (half!) if I'd just tame myself from eating at restaurants eight days a week. Those who know me also know I'm a dessert person. The markup is obscene. I've been making my own coffee and desserts lately, saving money and not to mention calories. My dining out is now limited to 3 meals per week.
4. Pay your credit card balance each month. Obvious, right? But sometimes easier said than done. Don't charge your cards to the maximum limit. And transferring credit card debt from one card to another can lower your score. Before making the purchase, ask yourself if you really need it.
5. Avoid opening new credit card accounts before applying for a mortgage. Too much available credit can bring your score down.
6. Wait until the bank has approved your loan before charging furniture and appliances. Those amounts will add to your debt.
7. If you've had some credit difficulties, you're not alone. Wait a year to apply for a mortgage. After 12 months, the penalty is less severe.
Buying cans of coffee by the boxcar-load is more cost effective than a daily trip to Starbucks, especially if you drink coffee like a fish. I'm convinced that social time spent with my cat Ted, a cup of coffee on the couch while wearing my new plush socks is a good financial move.
Fall has its Selling Perkstag:jodyzinkrealtor.com,2007:/news//3.772007-09-21T15:03:01Z2007-09-22T15:05:51ZShould we leave our house on the market, or give it a break and try again next year? With fall just around the corner, I've been hearing that a lot lately. The question hits close to home for sellers who've...
Should we leave our house on the market, or give it a break and try again next year? With fall just around the corner, I've been hearing that a lot lately. The question hits close to home for sellers who've been sitting on their properties for 6 to twelve months, many for much longer, without a single bite from a buyer.
Now, I'm not the most patient person in the world. That's evident from the kitchen counter-top spills that surround my coffeemaker. Before brewing is done, I've already had my first cup. There's a lesson here. While we're waiting for the current buyer's market to percolate, a little patience couldn't hurt.
Spring and summer markets are known for being the “busy” real estate season. Granted there aren't as many buyers scurrying to get into a home before the start of school, but the fact is, somewhere property is sold every day of the year. Sure, taking it off the market can give you some time to breathe and re-assess. But how likely is it to sell if it's not on the market? There are many good reasons to consider leaving your home on the market until it sells.
Homeowners up the street and around the block have given up, scrapping the For Sale sign. That means less competition for you. And buyers looking for a home in crispy, chilly weather will likely be more motivated than the casual looker. I'd rather have one committed buyer than 5 or even a hundred lookers. It only takes one good buyer to make a sale.
Consider also the cost of borrowing money. This latest cut in interest rates could work in your favor. First time buyers once soured on the mortgage mess may now lean towards making a purchase.
The changing seasons can be a good thing, too. A cozy fireplace isn't going to show as well in July, and holiday decorations may show your home in its best light. The Christmas tree in the spacious living room shows off the high ceilings. Leaves and snow may fall just in time to make the dead yard disappear.
Perhaps the best argument *against* leaving your home on the market during the upcoming months is the sheer inconvenience of it. Trying to sell a home in the midst of having house guests and parties could add to an already stressful time of year.
Come to think of it, the prospect of house guests might keep me on my toes to wipe up those darned coffee spills. Or give me an excuse to buy the good coffeemaker that provides plenty of time to pour a quick cup before it resumes brewing.
The Mortgage Messtag:jodyzinkrealtor.com,2007:/news//3.762007-09-08T00:13:58Z2007-09-08T00:23:53ZAll this talk about the mortgage crisis got me thinking about how hungry everyone is for more. More, more, more. More furniture ... more appliances ... more house. And it's so easy! Just sign here. It reminds me of how...
All this talk about the mortgage crisis got me thinking about how hungry everyone is for
more. More, more, more. More furniture ... more appliances ... more house. And it's so
easy! Just sign here. It reminds me of how Saturday morning commercials growing up made
me want to eat Capt'n Crunch and Lucky Charms for every meal. Getting fat on all that
sugar is the financial equivalent of living beyond our means.
Although I didn't understand it then, Mom always warned me, if something sounds too good
to be true, it probably is.
The mortgage crisis we're hearing about will take some time to sort out. Its long-term
ramifications remain to be seen. How did it happen? Some lenders, caught up in the
momentum of the real estate boom, enticed high-risk borrowers with low teaser rates. They
granted loans with low or no down-payments and little proof borrowers could repay.
Lenders gambled that housing prices would continue rising, and then the borrower could
just refinance their way out of trouble, or even sell for a profit. When housing prices
coughed and sputtered, borrowers couldn't sell or refinance for what they owed on the
property.
Poor underwriting is leading to more foreclosures and delinquencies as the teaser periods
end and monthly payments re-set at higher interest rates. Owners with a fixed-rate
mortgage who plan to live in their home for a while probably need not worry. The same
goes for an owner with a sub-prime loan that's current. Owners with an adjustable rate
mortgage, especially an Option ARM with negative amortization should consult with their
mortgage professional. In any case, be sure to understand your options. It can be much
too complicated to sort out on your own.
What does this mean to sellers? The pool of potential buyers will shrink. Shane Marzullo,
founder of Greentree Mortgage Services says, "Many will find it difficult, if not
impossible to obtain mortgage financing." Also, the increase in foreclosures can depress
community values resulting in saturated inventories, further driving down prices.
If you're a buyer, qualifying standards are in for massive tightening, so be prepared.
Providing documentation will be crucial and don't be surprised if your lender asks for
more just when you thought you'd given your life history. She's only doing her job.
Buyers need to get pre-approved before entering the market. Marzullo adds, There are
deals to be had, "but getting credit is becoming tougher and tougher,and it's taking
longer to complete a transaction. In this volatile market, what you qualify for today
could change tomorrow."
All that sugar-filled cereal that tasted so good is finally starting to cause a bellyache.
"Point of Sale" Talk is Backtag:jodyzinkrealtor.com,2007:/news//3.752007-08-25T00:04:15Z2007-09-08T00:36:53ZIt's made waves in the past but always seemed to drown in committee somewhere in One Government Center. The latest proposal requires Toledo homes being sold on land contract be recorded and comply with a minimal habitability requirement. Sellers would...
It's made waves in the past but always seemed to drown in committee somewhere in One Government Center.
The latest proposal requires Toledo homes being sold on land contract be recorded and comply with a minimal habitability requirement. Sellers would need a Certificate of Property Compliance or CPC before they could convey any interest in the property using a land contract.
A land contract is a real estate installment agreement where buyer makes payments to seller in exchange for the right to occupy the property-- usually 1-2 years. The terms are based on an agreed upon purchase price, minus a cash down payment (paid up-front, usually non-refundable) and an interest rate. When the contract expires, the buyer is expected to satisfy a balloon payment with a conventional loan, thereby paying the seller.
More often than not, land contracts are used when buyers can't get traditional financing. They're considered too “high-risk.” The seller in this case takes a risk by partnering with such a buyer. If a buyer has any hope of buying, they are looking for a seller willing to take that risk.
Sellers in today's market are also under financial stress. Perhaps they're moving away, laid off, or owe more on their property than it's worth. Lynn Fruth of Danberry Realtors would argue that the vast majority of sellers on land contract are just trying to sell their property. “They would love to have a buyer with traditional financing buy the property but that does not happen. And guess what? With the sub-prime finance market crisis, a huge number of buyers that would have qualified for a loan over the last several years will be unable to do so for perhaps years to come.”
Mr. Fruth points out that doesn't mean buyers shouldn't have full knowledge of the property's condition. They should. Buyers working with Realtors will usually have the property inspected as a condition of purchase. Even when defects are discovered, it's not uncommon for buyers to close without repairs being made. “Upside down sellers didn't have the resources to make repairs for their own benefit when they lived in the property and they don't have resources to make repairs at the time of sale either.”
Perhaps all these efforts pushing legislation would be better spent on trying to educate buyers.
Jim Loss of Loss Realty Group says by working with Realtors, buyers learn the importance of getting full-service home inspections. A proposed ordinance like this one may actually discourage them. Inspections initiated by buyers will likely be far superior to ones just looking for the “minimum habitability standard” required in the ordinance. “Added protection is just one more reason to use a Realtor.”
Not only could burdensome regulations create red tape, hoops and unnecessary delays, a willing buyer and seller could be unable to complete a transaction at all. Point of sale legislation could wind up hurting the very people it is intended to help.
Home Search Compromisestag:jodyzinkrealtor.com,2007:/news//3.742007-08-10T15:37:43Z2007-08-12T15:38:34Z Many home buyers say they're choosy and over-critical. And they should be. They're buying more than a roof over their head. They are buying a home. It will satisfy physical and emotional needs that aren't easily measured. There's real...
Many home buyers say they're choosy and over-critical. And they should be. They're buying more than a roof over their head. They are buying a home. It will satisfy physical and emotional needs that aren't easily measured. There's real psychology involved here. The home is a reflection of self, which makes the quest to buy the right one, really complicated sometimes.
Buyers searching for homes in and around Toledo have lots to choose from. When the inventory grows, buyers feel they can hold out for what they really want without really worrying about rising prices. So, the search can go on for months, even years. Consider how lucky a home-buyer would be to find a great property right out of the box! It happened for me. But for some buyers, finding a house that suits their needs early on can pose a problem.
Common thinking is.... Have I looked at all my options? Have I looked long enough to understand the local market? Are there better listings I haven't seen, perhaps at a better price? Should I wait and see what else I might find, or should I just go for it?
Don't pass over something ideal just because you found it quickly. Instead, quickly satisfy any concerns so you're prepared to make an informed decision. Your Realtor can help you find out how much the utilities run, the age of the roof, furnace and water heater, all common buyer questions. If the property quickly finds it's way into your heart and you don't jump on it, you may not get another chance. If it's sat for a year, it's not unrealistic to think it'll be there tomorrow and the day after. Consider, however, that it might go away. As crazy as it sounds, homes can sit for more than 12 months, only to get two offers within an hour of each other.
Let's say your search has gone on for years. Only a few homes have fit the bill and you've only made offers on two since the start of the search. The one you fell in love with was too expensive, and the other time you lost out in a bidding war. You've come close to making offers several times, but wound up backing away. You might be getting out and seeing homes that could work for you, but become paralyzed when trying to make a decision and following through.
Buyers who've been looking for more than 6 months should take a break to consider whether their expectations are realistic.
If you're serious about buying a home, compromises will always be involved. This is important in general, and especially when house hunting. Even the perfect house will have something that you'd like to change. It's common to love the kitchen in one house; the basement and bathrooms in another; and closet space in a third. For me, I fell in love with the 3-season porch in my current home. And it was the French doors that really blinded me to the fact the kitchen was really small.
I was fortunate enough to find my house on the first day of the search and knew right away that I could make it my own. My house is somehow intermeshed with my own sense of self. Finally! I've found myself. It certainly would not have happened, however, without making compromises.
Multiple Offer Negotiationstag:jodyzinkrealtor.com,2007:/news//3.732007-07-27T15:35:43Z2007-08-12T15:36:59Z A multiple offer situation occurs when more than one buyer shows interest in buying the same property at the same time. Few situations facing buyers or sellers can be more potentially frustrating. They are ripe with potential for misunderstanding...
A multiple offer situation occurs when more than one buyer shows interest in buying the same property at the same time. Few situations facing buyers or sellers can be more potentially frustrating. They are ripe with potential for misunderstanding and missed opportunity. It makes some people want to stand near the toilet.
As a seller with more than one offer, sometimes confidence sets in. Some sellers see it as an opportunity to ignite a war between buyers until one party is left standing. Most buyers don't appreciate this, especially when the price goes above market value. Expect them to become disinterested or make up for the inflated price by being difficult during escrow with inspections and contingencies. In a buyer's market where buyers can often choose between 30 other properties, don't be surprised when a buyer moves on. Greed can leave a seller empty handed with no buyers in sight.
Sellers risk less by choosing the “price satisfied” well qualified buyer. Let's get crazy and say an owner gets ten offers on his home. As a listing agent representing the seller, I would suggest first considering the buyer's qualifications. Let's say three of the offers are cash offers. The other seven may be set aside. Buyers offering the most cash forward would likely win out and be given notice of highest and best.
If one of the cash offers is highest, it might be accepted on the spot, and the other two accepted as back-up offers, but it might not necessarily be the highest. Perhaps the terms are better on one offer, and a buyer is more flexible with the closing and possession dates. Perhaps a buyer's lender is more reputable. A seller could counter all three cash offers, but also run the risk of ticking everyone off, thereby losing his best buyers.
Now for purchasers. As a buyer put on notice for his highest and best offer, it's important to know you may not get a second chance. By the same token, you should only go as high as you feel comfortable. Your Realtor can offer suggestions and advice on other similar properties nearby that have sold, but decisions are made by the buyer. Also, be aware that even a full price offer does not guarantee you will obtain the property. Other offers may go above list price or may have more attractive terms, such as financing or possession dates.
Keep in mind, if the seller counters your offer, your offer still remains at risk. There's the possibility the seller could rescind the counter offer and accept another offer before you've had an opportunity to consider it and respond.
In these situations, buyers and sellers alike should appreciate that only one offer will result in a sale, often leaving the other buyers disappointed. While little can be done to alleviate those feelings, fair and honest treatment throughout the negotiations process goes a long way. Prompt and open communication improves the chances that everyone, successful or not, will feel they were treated fairly and honestly.
Avoid These Buyer Mistakestag:jodyzinkrealtor.com,2007:/news//3.722007-07-18T15:33:05Z2007-08-12T15:34:42Z When buying in a buyers market, showing a seller you can close quickly could give you an advantage. That means being ready to pounce when the right deal comes along, and making sure your financing is ready to go....
When buying in a buyers market, showing a seller you can close quickly could give you an advantage. That means being ready to pounce when the right deal comes along, and making sure your financing is ready to go. Here's a list of what not to do.
#1. Shopping for a home before you shop for a mortgage. More than 85 percent of today's buyers start their search online. Many visit weekend open houses. While it's fun to shop that way, the smartest buyers first shop for a mortgage to finance their purchase. That way they know the maximum home loan they can get up-front and avoid disappointment.
#2. Move money around. Lenders are concerned about the source of funds for your down payment and closing costs. You’ll likely be asked to show proof of liquid assets including checking, savings, CDs, stocks, mutual funds and retirement accounts. If you’ve moved money between accounts, there may be large deposits and withdrawals. The mortgage underwriter may require a paper trail of all this, making you to produce canceled checks, deposit slips, and other seemingly inconsequential data, which could get quite tedious. You may become exasperated at your lender, but they're only doing their job correctly. To eliminate potential fraud, it's a requirement on most loans to completely document the source of all funds. Moving your money around, even if you are consolidating your funds to make it "easier," could make it more difficult for the lender to properly document. So leave your money where it is until you talk to a loan officer. Oh yeah, and avoid changing banks if possible.
#3. Changing Jobs. Switching jobs can negatively impact your ability to buy a home. This is especially true if a much of your income comes from bonuses, overtime or commissions. The change creates uncertainty about future earnings. Lenders rarely consider future bonuses as income unless you have been on the same job for two years and have a track record of receiving them. Then they’ll average your bonuses over the last two years in calculating your income.
#4. Making Large Purchases. Don’t do it. When determining your ability to qualify for a mortgage, a lender looks at your "debt-to-income" ratio. That's the percentage of gross monthly income (before taxes) you spend on debt. This includes monthly housing costs (that’s principal, interest, taxes, insurance and homeowner association fees if any). It also includes your monthly consumer debt, including credit cards, student loans and car payments. Any large purchase can negatively affect your “debt to income ratio” making it more difficult to qualify for a loan.