Sunday, February 27, 2011

580 FICO and you can still buy a home!

I love hearing about new 'products' to help in the home purchasing/selling arena!

Some seem crazy, some seem fantastic. This one is a little of both.

The FHA loan programs have been a wonderful thing for our market. They have enabled some with very little money to purchase their home. Help from a family member, ways to do work on a home built into the loan, not having to have reserves in the bank are a few that increase the ability to move inventory.

And, we need to move inventory. Will need to move inventory for quite some time.

So, one of my favorite lenders told me about a new product that FHA has to offer for someone that has below their generally minimum 620 FICO. For this loan, they must have a minimum of 580, but wow, that's amazing.

A few stipulations, but not insurmountable.

* Must have minimum 580 FICO with at least 1 valid credit scoring. If there is a Short-Sale in their history, has to have at least a 3 year lapse.
* Debt to Income ratio 45-50% dependant upon cash being brought in, borrowers current housing expense and payment history for same.
* Reserves must be between 2 - 4 months.
* Co-Borrowers that are not going to be living on the property need to have between 2 - 6 months reserves.
* No multi-residential. No flips where seller hasn't owned for at least 6 months.

Call me if you have more questions and I can answer and direct you to the lender that shared this with me.

But, really, to have purchasing power with a 580 FICO? Fantastic! If you've been saying "NO" because you're scared to get off the fence due to your credit rating, now may be a good time for you to take the leap!

Thursday, February 24, 2011

Short Sales, Short Sales, Short Sales....

They have been around for a while now and they will surely be around for a while more. Did my infamous reading again today and noted an article that I share as it talks about some additional changes in the HAFA program. And, of course, why we even need these changes.

Real Estate continues to have the need to speed up the Short Sale process, learn new ways to help expedite them. As a Realtor in Southern California, I have to consistently update my education, network with other agents, listen to what works and what doesn't. Understand that what may work in one instance, doesn't always work in another.

My opinion is we have a ways to go. But, the market will stabilize the sooner we get a handle on the situation. When we can eliminate additional foreclosures by doing Short-Sales instead, it will assist us in the stabilization.

I hate, truly despise, sitting in a classroom for EIGHT hours. Yet, I do it...on a pretty regular basis. Next month, two days in a row, eight hours a day, I will be sitting in the Hilton Garden Inn here in Valencia to be labeled a CDPE, Certified Distressed Property Expert. Yippee! ;o)

Now, mind you, the certification doesn't mean a whole lot to me, just the education it may provide to further assist clients in their home selling and/or purchasing process.

And, it means that I will most likely be attending another one fairly soon after, as more changes are made.....

Sunday, February 20, 2011

Refresher Course! In case you forgot......

Funny, when we meet with sellers that tell us about how expensive the carpet was 10 years ago. Or the green granite that goes so well with the green sink in the kitchen. Or the silver-nickel sinks they put in the bathrooms.

Some things are hard to tell sellers....that although they may appear beautiful to you.....the buyer for your home will make changes.

So, sellers, keep in mind that you do things for your house to make it a wonderful home for you and your family. And, while the ultra-expensive purple drapes that went fantastic with your couches made your living room look spectacular....the buyer may want to decorate in red and turquoise.

Get the picture?

Yahoo had a 'Refresher Course' article this morning:

Some things in Real Estate never change. Many things sellers do don't add value in the buyers eyes. And, when trying to get the best possible price for your home, it's the buyers eyes that count.

Wednesday, February 16, 2011

New Lending Rules On The Way

Fannie Mae, Freddie Mac and FHA are expecting to make some changes in the near future and every buyer or seller needs to be aware of these changes.

Just a brief run-down from the information I received. It is just to make you all aware.

Fannie Mae - Freddie Mac: Expected Changes

* Conforming High Balance/Jumbo Loan Limit Decrease from $729,000 to $625,000

* More Risk Based Pricing Premiums and Add Ons

* New 5% Lender Risk Retention Requirement for many Conventional Loans

* Stricter Condominium Project Approval and Financing Guidelines

* Stricter Minimum Fico Score Requirements

FHA Financing: Expected Changes

* Mortgage Insurance Premium Increases

* Condo Project Approval Expiration's

* Possible Increase in Minimum Down from 3.5% to 5%

* Possible Reduction in Allowable Seller Closing Cost Credit from 6% to 3%

* Possible Increase In Minimum Fico Score

These are huge changes that will cause some buyers to lose purchase power. That means less buyers out there for sellers to sell to.

Sellers, be aware, price properly. Buyers, be aware, get off the fence.

One of my favorite mortgage brokers provided this information in a neat orderly fashion for me to pass on to my clients.

Hope it helps.

Sunday, February 13, 2011

Location, Location, Location

Sunday morning, house is sleeping, I'm reading.....and have another confirmation of what we all know in Real Estate....

Location is a Big Part of Home Buying and Selling!

When the home in one neighborhood doesn't sell for the same amount as the very similar home in another neighborhood.....location.

When the one closer to the freeway sells faster to the commuting family than the one in the center of town.....location.

When Malibu beachfront property is still able to sell for, holy cow what was that price tag in the article? SEVENTEEN MILLION?, location!

Ahh, I sooo miss the beach!

Wednesday, February 9, 2011

You're In Escrow - DONT BUY A THING!!

I was reading this morning, I'm so typical, and came quickly across an article in the LA Times Real Estate section about some changes in credit search and standards for loan applications.

Here is the link to the story:

I just thought it was kinda of funny. Haven't we been telling our clients for years that once you're in escrow and the loan has been approved....Don't Buy A Thing!

Before we start looking for homes together, all my clients must discuss financing with a lender, bank, broker. Need to be sure they can buy the home they want. Needless to say, that banker must look at a multitude of items for their loan application. One being the buyers debt. And, the debt to income ratio.

The buyers get their loan approved, terrific! But, and a big but here, banks check towards the end of escrow to make certain that no additional debt, or hidden debts, are discovered. Because why? That would, of course, change the debt to income ratio.

So, don't ignore your Realtor when they tell you that you can't go buy new furniture, or that big Television before close of escrow. Don't start applying for new credit lines either. The banks don't want to see changes on your credit. They want to see the same buyers debt to income ratio at the end as they did when they originally approved your loan.

Really, just be is a virtue after all!

Sunday, February 6, 2011

34 Showings in 34 days, Not Sold?

When your seller wants their home sold, what do we do?

We market it! We put it on a plethora of websites, host open houses, run an agent caravan, price it to sell, reduce it to gain additional interest, network with agents and buyers, set-up toll-free sign riders, make color fliers, keep a steady eye on the competition, follow all leads, and present all offers to sellers.

What does the seller do?

They are the vital ones to help sell their home. Make it available, keep it clean, do their absolute best to get it in the finest show condition possible...and respond to all offers presented.

And, they are the ones that need to know to accept a valid offer when it comes. Yes, absolutely do negotiating, work on getting the best price possible. Getting the best price possible...... what if it's less than they want? Should they walk away? Maybe, sometimes, only sometimes. Each case is individual, for certain.

Keep in mind the old adage in Real Estate, 'The first offer is usually the best', and it is very frequently right on. It may not be the best terms, may not be the best price, but generally it is the best in the long run.

So, I speak of the long run? Being on the market for a long while doesn't usually help get more proceeds for the seller. It makes people wonder why it's not sold yet.

And, a seller should wonder why also.  34 showings in 34 days? And, the property is not sold?

I wonder why......?

Wednesday, February 2, 2011

Love Those Clients Closing Smiles!

Almost nothing feels better than handing over the key to my clients' new home! And, yesterday was one of the most adorable smiles ever.

I've known this client for about 15 years, our kids played hockey together and we've stayed in touch. The chapters in her life have changed and it was time to find her a new home.

We looked for many months, wrote several offers, and got approved on a Short-Sale(SS) at the end of last year.

I called her on Monday to let her know the loan funded and, that on Tuesday we would get a call saying it had recorded and was now officially hers.

So, at 2:30 yesterday I missed a call and she left me a message noting that I should be proud of her for waiting til that time to check on recording status. I said, "Hell, I waited until only 1:00 pm!" ;o)

But, just before 3, we got the call, I went to pick up the key, and met her at the property at 5:01. Hah, I actually got there a few minutes early so I could open the garage and let her pull right into her new home!

The really cute part of this story is that she was going to sleep there last night! I said, are ya crazy? It was in great need of cleaning, carpet and paint. She had those people coming the next morning @ 8am and thought best if she was just there already......and she was sooooo excited.

It's adorable to see someone looking absolutely delighted about their new home. She could see past the sticky floor by the fridge. See way past the dog-dirt carpet in the living-room. Her friend laughed when she and I both got down on all fours to sniff the bedroom carpet for dog accidents! And, she even figured out how to cap off the refrigerator water line that the seller left dripping into a cup.....that was over full!
First thing this morning, I called to see if she really did sleep there.....what do you think?