Tip Jar: FHA is Wack the Sequel: CASH IS KING
In a previous video blog, FHA is WACK, Stephanie discussed how HUD, last year in 2011 decided that they would cut seller's assist for the FHA loan product and what that means to first time home buyers. In this video the discussion is about what this in seller's assist means for sellers. To summarize Stephanie's thoughts, she believes the buyer pool will become smaller since many of the first time buyers will not be able to afford their closing costs.
Sellers will need to become significantly more flexible on home prices if they want to sell, and sellers may need to become comfortable with the reality that their home may sit on the market for a longer period of time. Sellers may also need to consider staying in their home for another year or so or even rent their home depending on their circumstance.
***FHA is a First Time Home Buyer loan where the buyer only needs 3.5% of the loan for the down payment and they are eligible for 6% "seller's assist". Seller's Assist in essence is when a Buyer rolls all or part of their closing costs into their loan. Seller's assist is a real life line for those buyers who just do not have the liquidity to pay for both a down payment and their closing costs. This reduction of allowable seller's assist had not yet been implemented when this video blog was recorded.***
Selling a Philadelphia Condo – Deliver the Condo Docs Quickly!
In Philadelphia, for a condo transaction, a seller must provide to the buyer all of the condo docs applicable to the condo association. Once the buyer receives, they have 5 days to review and within that time period, the buyer has the right to terminate the agreement-of-sale. Thus, it is important to get this information to the buyer EARLY in the deal.
Oftentimes a seller will still have their condo docs which makes it easier. But other times, you will need to order a new set through the condo association or the management company which will then cost some money, typically a couple of hundred dollars. In a time crunch, the real estate office may just need to pay for that and get reimbursed from their seller client later.
For example, we just had one recently where the management company took awhile to produce the resale certifcate and the condo docs. By the time we received it, it was late in the deal. The buyer decided to terminate the agreement-of-sale over some obscure language in the condo docs. In reality, it turns out that the buyer told his mortgage company and us that he was buying the condo as an owner occupant but in reality the mortgage company could only do an investor loan as he had just purchased 3 other properties in the last 6 months, which the buyer agent was aware of. It almost appeared that he was committing fraud but with this provision in the agreement-of-sale, it was his way of slithering out of the agreement. Slimeball! Either way, we will sell the property again as that is what we do and we now of course have the condo docs to deliver to the next buyer as we do not have to wait around for the management company to produce.
Where this is even worse is for short sales as often times a seller or a real estate office may be reluctant to pay for those items until there is a short sale approval, but also the longer you wait, the more you give that chance for the buyer to flake on the deal as well.
What are your thoughts?
Tip Jar: Save Your Money for Closing Costs!
Today's Tip Jar tip is: SAVE YOUR MONEY FOR CLOSING COSTS.
It came to my attention when Peter Schneider from Wells Fargo sent me an email reminding me that HUD is looking like it soon will be implementing the limits of seller's assist a consumer is allowed when getting a loan to purchase Real Estate. Sellers Assist allows a buyer to roll their closing costs into their loan when they do not have the available cash to pay for it at settlement. For buyers looking to purchase a 100K home, it looks like the full 6% seller's assist is allowable. For those buying homes over 100K, the assist may be cut to 3%.
So what does that mean in simple terms? FHA is Wack!
Most homes in Philadelphia are over $100,000 and many buyers use the full seller's assist because they do not have more than the required 3.5% for their down payment. For them, seller's assist is the KEY that opens the door to homeownership. Not so with this new FHA standard if or when it is implemented. So if you are a buyer planning to purchase a home in the near future, you need to SAVE YOUR MONEY FOR CLOSING COSTS because the days of 6% seller's assist may be fading away fast!
Call me if you would like to speak to a mortgage broker about your eligibility to buy a home. And Sellers, call me to see how this may impact your Sales Strategy: Stephanie Somers at (215) 400-2620
“It’s A Buyer’s Market.” True or False?
It's a buyer's market. Is that a true or false statement? Hmm...I would imagine many would say it is true. So I asked a few people what they thought. See my video clip:
Looks like most people believe that it is TRUE that we are in a buyer's market but I beg to differ and I challenge the popular belief, particularly in my Philadelphia Real Estate Market.
In a video clip I did a few weeks ago, I featured one of my clients as he was looking at trinity homes in Queen Village and Bella Vista. Recently we wrote an offer on one of the properties he viewed. This property was on the market for quite some time and needed a decent amount of home improvements and updating. But just as we worked out an agreeable written offer for the seller, two more offers from other buyers came into the picture! What are the chances? I thought this was a buyer's market!
Well, the chances are clearly better than what most people think. Multiple offers are not a thing of the past in Philadelphia, even in this so-called "buyer's market". A multiple offer situation will often occur when the subject property is #1- priced right and #2- is located in a highly desired location. These two key criteria when combined create a powerful win-win scenario for a savvy buyer whether they are a first time home buyer, a seasoned home owner or a Real Estate Investor.
I always say to my buyer clients, if you love this home enough to write an offer, someone else probably does, too. Therefore if you are considering writing an offer on a home that is priced right and located right, then be prepared to write a strong and fair offer and do not delay. Timing is often everything.
Tip Jar: 3 Tips You Can Bank On
Today's tips are from our own Chris Somers during his training session on sales and motivation at Remax Access in Northern Liberties this week.
Tip Jar: Don’t Believe the Hype!
Today's national headlines read that the home builder market is at an all time high, in fact has doubled since September 2011, and the housing crisis will end this year. The future certainly sounds bright. We are all ready for some good news, right? Let's just keep in mind that there is still a significant amount of foreclosures that are bringing prices down for many communities and appraisals are still coming in low. Thankfully we have historically low interest rates for those who are able to get a loan but there again, getting a loan still remains challenging for so many people who want to buy.
Our tip? Don't believe the hype!
These headlines are attention getters, I admit, but let's take a step back. The data gathered to fuel these headlines are gathered nationally. That means the info is a collective from all of the states across the U.S. So, the market condition in your area may not reflect the national headline news.
My strong suggestion for you as a consumer, a home buyer, a home seller or just an inquiring mind, is to contact your local real estate expert to get the market statistics in your neck of the woods. Find out about the new construction projects, the foreclosures, and the recent sales data. That information will provide you with the real news.
So don't believe the hype, not until you do a little due diligence in your real estate market!
Public Enemy said it best:
Tip Jar: Tips for Prepping a Tenant Occupied Property for Showings
Our tips are always tailored to our client's needs and the property we are selling. The basics when preparing a home for showings:
1) Open up the space!
2) De-clutter.
The layout in this home is great. It is open and contemporary. But the furniture is arranged in a way that blocks the flow from the entry door to the rear of the property and there are many personal items out in plain view. Since this home is occupied by three people it is important to be sensitive to their needs in the process of selling. Therefore we have come up with a Plan A and Plan B for preparing this home for showings.
Plan A is to keep the property in the same condition it and monitor the feedback. If the feedback mentions anything negative about the way in which the home shows, we will go to Plan B.
Plan B is to open up the floor plan by moving the couch that divides the living area and decluttering the surfaces. No more than three items on a surface is the rule of thumb. Since this property is such a fantastic price and is in a great location in Northern Liberties, there is a good chance we will not have to make any alterations at all.
Tip Jar: Don’t Fore-go Your Pre-Settlement Walk-Through!
This tip is for our buyers out there! A pre-settlement walk-through is what we do right before a settlement occurs. Typically it includes the buyers and the buyers' agent and it is an opportunity to check out the property before you sign off on buying that home. The walk-through allows the buyer to check on the condition of the property to make sure all repairs have been done and nothing new has popped up. We want to make sure there are no problems at settlement or post settlement. That is why we walk through the property the day of the settlement, the day before settlement or in this case a few days before.
This pre-settlement walk-through in the video reveals that only 50% of the repairs have been completed and the seller has only a few days to get things wrapped up. If the seller fails to do so, then these few repair items can delay settlement. We certainly don't want that to happen! So, buyers... do not fore-go your pre-settlement walk-through!
Tip Jar: Have a Bad Day
Success does not exist without the SUCK. So our tip to you: Embrace those bad days! They are going to happen.
When did it become a belief that success comes easy? It does not. It requires hard work, hard knocks, and sometimes a hard head to finally see the fruits of success. Success without the suck just does not exist. We've all see the billboard...Bill Gates started Microsoft in a recession! That's what I am talking about. To achieve success you have to not only deal with moments of suckiness but also see the opportunity in that sucky moment.
Let me put it like this, sometimes you just have to cry through slicing that smelly onion to get the sumptuous flavor in your recipe!
I challenge you all to work through the SUCK to claim your SUCCESS.
Speaking of some well-earned success, congratulations to REMAX ACCESS in Northern Liberties, Philly for coming in at number 3 for the entire City of Philadelphia for total number of transactions (properties sold) in 2011. What a great year! Everyone simply kicked butt.
What is a Turnkey Property? Stephanie Somers Explains…
Come take a ride with Stephanie Somers and she'll explain what a turnkey property is, along with a peek at a ready-to-rock property for short sale in Northern Liberties.
Any questions? Ask Stephanie!
Related:
Tip Jar: To Sell or To Rent Your Property in 2012? Ask Stephanie!
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