Friday, December 27, 2013

N.A.R. Home Buyer Survery

National Association of Realtors did a survey of home buyers in 2013 and the results were interesting to me so I thought I'd share with you!

First step was....as expected....searching on the internet for prospective homes. Use of the internet rose to 92%.

88% of buyers used a Realtor to help them, back in 2001 it was only 69%. Think buyers are getting smarter. 42 % said they found their agent by a friends referral or family. Surprisingly only 12% used an agent they worked with in the past. Bad agents or fickle buyers?

Most buyers searched for about 3 months and looked at about 10 homes. 38% were first time buyers. Seemed like more on both of these stats for my clients!

On the seller side ~ typical sellers stayed in their homes for 9 years. Most sold for 97% of list price and about half said they had to reduce their price at least once.

85% of sellers said their home was in the MLS, 3% more than that said they were represented by a Realtor. Of the FSBO's, 40% said they knew the buyer before they decided to sell.

A small 13% said they delayed selling due to the value of their home vs. mortgage balance. We all can relate to that.

Small portion of brand new homes were sold.....16%.

Typical buyer age? 42. Typical first time home buyer age? 31. Fifty-Two was the average age for repeat buyers. Yep, that all seems right on.

Most buyers utilized financing, typically 90%, with 10% down.

I found a few interesting, many very atypical due to market conditions. But, I presumed some of you would find the results worth reading.












Friday, December 20, 2013

If You're Thinking About Going Solo In The Sale of Your Home, Think Again

There is something called a FSBO (prounounced Fizzbo)....aka the For Sale By Owner.

We haven't had too many of these in years but I suspect they will start showing up again as the market changes next year. As sellers don't earn the same equity in 2014 as they did in 2013 they will seek ways to keep as much proceeds in their pocket as possible. Very reasonable.

That's a Realtors job as well. But, you knew that, right?

Did you know that a Realtor is the one that will really get you the most amount of money for your home possible? Want to know how?

Most buyers start on the internet for their next home. Online marketing isn't for the newbies. You need someone that knows how to create and follow through on the most effective internet marketing campaign to get your home seen by the most amount of prospective buyers. Right? Of course.

Basic information about a home for sale isn't quite enough. Different homes have different 'values' based upon their local market. Their local neighborhood. A seller will never have the information that a Realtor has to bring the best buyer to your home. Never.

Networking is the name of the game in many home sales. I had a buyer that had been searching for quite some time. We found a home, multiple offers, my client was selected due to a relationship I had with the listing agent. She wanted to work with an agent she knew, trusted, and would close the transaction on time. Another, same story, 9 offers on that one. My client was selected based upon my expertise known by the listing agent.  When representing sellers, I'll be the one that guides you on the reasoning for selecting one offer over another. Experience with the people that I work with, the years of reviewing contracts, the mistakes to be avoided. No seller will know as much as a seasoned Realtor will. Trust me. None.

Yep, it's one smart cookie that knows an Realtor will get you the most bang for your buck.

 Are you a smart cookie?






Tuesday, December 17, 2013

Wow, Really? Buyers Don't Ask Their Lenders These Questions?

Well, some of my buyers may not as I likely have found out most of it for them and already told them just to be on the safe side!

But, that is my obsessive nature I suppose. And, the fact that I always want a client to know going in what's going on so there are no scares at the end of escrow!

Read this today as the things buyers forget to ask their lender:

1) What's your APR, Annual Percentage Rate? ~ Come one.....please tell me you ask? Well, you better now! It could mean big bucks in the long run! Don't get confused from one lender quote to another without asking the actual APR.

2) Impounds? What's that? ~ If you want to be paying your property taxes and insurance monthly instead of annually, could be a great scenario for you. Particularly if you aren't a good budgeter!

3) Can you get penalized for paying the loan off early? ~ I love paying extra on my mortgage. Makes me feel like I'm saving tons of money...which I am! You can get penalized on some loans. ASK!

4) What NOT to do until you close escrow! ~ Oh goodness, ask any of my buyers....pop quiz! DON'T GO SHOPPING OR CHANGE JOBS!!!



5) Who do I pay my mortgage payment to? ~ First month, oh yes, likely who you took the loan out via. 2nd? Hah, look for your loan to be sold....yessiree! Pay attention to those notes that come in the mail after you close escrow!

Okay, I think most of my clients would get an A+ on this quiz! 
What about you? How'd you score?

Friday, December 13, 2013

So Now It's Los Angeles To Sue Some Banks

The city of Los Angeles is filing lawsuits agains Citi, Wells, and B of A saying that these three behemoth banking institutions did discriminatory lending practices between 2008 and 2012 that cost the city of L. A. more than 1.2 Billion.




L. A. city attorney, Mike Feuer, said "These lawsuits send the firm message that we will use every tool at our disposal to fight for all Los Angeles taxpayers and neighborhoods."

He feels that the banks discriminated in their mortgages since at least 2004 by imposing different terms or conditions. The lawsuits charge all three banks with redlining and reverse redlining. (refuse a loan to someone because they live in an area deemed to be a poor financial risk)

Hmmmmm I say..... All of the banks, needless to say, are strongly denying this practice.

Now, I can't say I wouldn't be surprised if the banks didn't lend due to appraisal issues on bad properties. Nor could I say that I'd be even less surprised if there were loan brokers that did commit Redline infractions and those loans were then subsequently sold to B of A, Citi, or Wells.

Regardless, I understand the frustration, but I still believe that it will just trickle back down to the consumer even if the suits are won. As well, of course, as the cost to sue these big dogs.





Tuesday, December 10, 2013

Phew, Lots of Financial Changes Planned for 2014

FHA loan limits are dropping down. Fannie and Freddie are going to be charging more in fees. A new regulation, The Qualified Mortgage, comes along next year. The tapering of buying mortgages will likely happen in 2014 too.

Okay, so what does that all mean to you?

Quite obviously, it's going to be harder to buy a home in 2014 than it was in 2013. Not that it hasn't been hard to buy a home for the last few years though, right?!?!?

I'm such a glass half full Realtor! And, a glass half full woman. We can cry and moan about what it's going to cost, how much harder it's going to be, but many still will be able to buy a home won't they?



Maybe not the exact one you were hoping for. Maybe you'll have to spend a little less. Maybe it will cost you a bit more. But, with rentals still being pretty outrageous, home ownership is the way to go.

Okay, I'm done. Enjoy your day!

Friday, December 6, 2013

Foreclosure Activity ~ Curious?

I'm pretty sure I did a post recently about the decline in foreclosure activity in the beautiful Santa Clarita Valley. Less than 1/2 of what it was just a few years ago.

Sharing an article I read this morning to remind Californians that we are a non-judicial state and that the majority of the remaining foreclosure activity is in the judicial states. As in, you have to go to court to get a property foreclosed on. Needless to say....it takes a whole heck of a lot longer. So more properties would still be locked up in the system in judicial states.



Click On The Link Below For Full Reading:


Now, you'll see (as I don't hide anything), that it right away says it's a bit longer than before. Well, go figure, the market has slowed down a bit so of course it will take a lengthier time to clear it all out. Just like with a standard sale right now.

Anywhohow ~ that's my share on the, getting to be old news, foreclosures in our fair valley.

Lauren@KeepYourWitz.Com



Wednesday, December 4, 2013

Following Up On The Request For Repairs

Last week I blogged a bit about the Request for Repairs in a Real Estate transaction. Yep, today I have to follow up with the VP, Verification of Property Condition.

Nearing the end of your escrow, generally around the same day the buyer is signing their home loan docs, a final walk through is done at the property being sold.

Buyer(s) and their agent go to home to see it one last time before escrow closes. Unless changed, contractually it is within the last 5 days of the escrow period.

There are two most important reasons to do this walk through. Verify that the property is in the same condition as when the offer was written. Confirm that any agreed upon repairs have been completed.

Most of the time everything is done....most of the time everything is as it should be. However, once in a while, really maybe once a year, something is a bit amiss.

Maybe a curtain rod has been removed. Possibly the refrigerator that was to stay has been packed onto the sellers moving truck. Maybe not all the repairs agreed to have been completed.

Oh goodness, what to do! Not a biggie. Between the listing and selling agent we work it all out. I've seen some agents just freak out and make a 'mountain out of a molehill' about something amiss during the walk through. Soooo not necessary.


Now, I'm not going to kid you, being a Realtor is very stressful and I can get a bit attitudish (I know not a real word) once in a while. However, the VP is generally easily corrected and usually just a misunderstanding between the parties. One more walk-through may be necessary, so a little bit more time? It's worth the effort and worth the time.

Questions? I'm here to answer them for you! ~ Lauren@KeepYourWitz.com



Tuesday, November 26, 2013

What's A Request for Repairs?

As a Realtor for almost a dozen years now most items on a home sale transaction are pretty basic. I thought you may want to know a bit more about the infamous Request For Repairs.

In the beginning of the escrow process buyers generally will have a professional property inspection. I always recommend it. The inspectors subsequent report will identify to the buyer problems with the home now and possible problems with the home in the future.

The seller may, or may not, repair these items for the buyer. So, how does that work?

Aha, therein is the reason for the Request for Repairs. Everything in Real Estate is negotiable, everything I tell you. Defects found in an inspection report are as well.

Now, the inspection report doesn't mean you can generate a 'wish' list of repairs to be completed. But, it does mean you want to spend time with your family, and your agent, to determine which items are of the most concern to you.

Normally I would recommend items that are related to Fire, Safety, and Health. I would never suggest that you ask a seller to paint a wall. Nope, not one I would suggest.

However, you may ask the seller in a few different ways to take care of the issues that are a concern to you.

Ask them to repair them. If you want a contractor to repair them...be specific. If not, the seller does not have to use one, just correct in a good, skillful manner and comply with any applicable legal requirements (i.e. to code).

You may ask them to provide a seller credit at close of escrow so that you may correct the items once you own the home as you see fit.

Keep in mind there may also be lender required repairs. Seller is not obligated to repair these either, unless it is written into the contract originally or negotiated via a Request for Repairs.

Now, just because you ask, does not mean you shall receive. A seller may refuse, a seller may do a few, a seller may do all, part repair, part cash.

Everything is negotiable. Don't ever forget that.



If the sellers response is acceptable to you, great. If not, continue the negotiations.

The buyer may cancel the sale if seller is not willing to take care of particular items to the buyers satisfaction.

So, you've agreed upon repairs, or credits, now what?

Oh my, I'll do a blog post about the VOP! Keep reading!


Friday, November 22, 2013

MLS Stats? ~ Not!

I've been sharing them with you for a bit but they are pretty much the same as last month so I shall not bore you with numbers today.

In our lovely little valley we have just under 600 homes, townhouses, condos, for sale.  Still closing about 300 every month and still very limited amount of distressed properties compared to a year or so ago.

So, that's not the topic today!

Topic is where we will be this time next year. Yes, I'm doing a little ball playing with some crystal.




I do think inventory will continue to climb. I do think prices will continue to rise. I also believe that interest rates with rise as well. However, all will be in very small increments. Minute amounts. Teeny little bits.

I probably have already said this, but I feel pretty good about my thoughts. I will be surprised if I am wrong. And, oh, how I hate to be wrong!

Wednesday, November 20, 2013

Nice Home Loan Rates ~ Still!!!

Mortgage Interest Rates*
Rates as of Monday, 18th November, 2013:
 TermConformingAPRPayment per
$1,000
30-Yr. fixed3604.125%4.31%$4.85
15-Yr. fixed1803.25%3.49%$7.03
7-Yr. fixed ARM3603.5%3.11%$4.49
5-Yr. fixed ARM3603.25%3.19%$4.35
VA 30 Fixed3603.875%4.33%$4.70
FHA 30 Fixed3603.875%5.45%$4.70
20 yr fixed rate 417,0002403.875%4.31%$5.99
10 yr fixed rate 417,0001203.25%3.61%$9.77

*Rates are subject to change due to market fluctuations and borrower's eligibility. Payment amounts do not include amounts for taxes and insurance. Actual monthly payment could be higher.

Friday, November 15, 2013

Interesting Or Amusing? Depends If You're Red Or Blue!

I read this the other day....yes I read Real Estate info EVERY DAY, and found it interesting (and amusing) enough to share with you!

Home prices gains are a wee bit higher in the Blue Metros than the Red. (Blue is Left, Red is Right wing in the political jargon). According to the survey 'Home prices are skyrocketing in many of America's bluest metros.' and 'The home price rebound has bypassed most of America's reddest metros.'

While I smile a bit at the statements.....it goes on to point out that the blue metros suffered more than red so it makes some sense.

Hopefully it won't create any further party separation but it likely will have different effects on each one, creating different opinions on how to correct housing in general.

Aren't we supposed to be the Red, White, and Blue?

Tuesday, November 12, 2013

Chief Economist Yun, From NAR, Suggests Expectations For 2014 Housing

National Association of Realtors has, of course, a chief economist. A good guy, Lawrence Yun, I like to read what he has to say and usually I agree with him.

Again today, I agree with Mr. Yun.



He expects existing home sales to be up about 10%. He said that this year price increases should end about 11% higher that last year and yet he expects 2014 to be only about 6% appreciation.

Many Americans will be in a good position to purchase a home in 2014 in many areas. However we are still a bit low based upon the last 40 years of monitoring.

Mr. Yun feels the top 10 markets for a housing turn next year are:

Salt Lake City Utah, Naples and Tampa in Florida, Atlanta Georgia, Boise Idaho, Houston Texas, Charlotte North Carolina, Denver Colorado, Seattle Washington, and Tuscon Arizona.

He didn't touch on Southern California....but I think we can all agree that we have seriously rebounded already!


Friday, November 8, 2013

Nice Pay Back!

I read this just a moment ago and since I'm in a HUGE rush out the door I'm just sharing the link to the L.A. Times article I read.

Freddie is paying the U.S. Treasury back a boat load of money!



And, I Love That!

Tuesday, November 5, 2013

Mello Roos, Property Taxes, and Home Values

Most everyone that is buying or selling, in Santa Clarita Valley, has likely heard of Mello Roos.

To some it is a deal breaker, to others, it is part of the whole picture of their perfect home.

A little tid-bit of knowledge about the Mello Roos' for you follows:

Mello Roos, School Bonds, Community Financial Districts, Landscape Maintenance....all are forms of property taxes that are above and beyond the normal tax. We generally calculate about 1.25 to 1.33 for property taxes. Yet, with some of these extras you can be paying significantly more on your property tax statement.

How long do they last? One of the biggest questions. All are different. Some are as short as 14 years, some as long as 40. Most expire after a period of time, but I have heard of some renewing.

How much are they? Generally depends on what type of special assessment it is. Also usually depends upon the size of the home. I've seen LM as much as 1200/year. I've seen School Bonds around 2000/year. I've seen Mello Roos as much as 7000 per year and as little as 600 per year. Always ask your agent if yours has any.

Where in SCV? Stevenson Ranch, Fair Oaks Ranch, Valencia, Saugus, Tesoro.....lots of areas in Santa Clarita.

How do you know if the home you are interested in has one? Ask your agent! We know how to figure it out, well we sure should.

So what if the home you love has a special assessment?  You talk to your lender to make sure the extra amount is still okay for your loan program. It's considered into your monthly payment. As long as you can afford it, okay then!

Pay attention to these extra taxes when you see a home very undervalued. When you have to consider the cost on your taxes, you have to consider them as part of the cost of your home.

Are they deductible on your income taxes? Defer that question to your tax adviser. Pretty much every one I know writes it off, but there are stipulations on some. So be aware.

That's a brief, but hopefully helpful, synopsis on Mello Roos' and the like. If you have more questions, feel free to shoot me an e-mail: lauren@keepyourwitz.com


Friday, November 1, 2013

Litigation Reserves, GSE Settlements, And, We The People

Many banks are making settlements with the GSE's for crappy loans sold to them in the 2ndary market a few years back. B of A is still struggling with one of the biggest likely settlements due to those sub par loans sold by Countrywide.

This brings to the head of how much these large banking institutions must keep in their litigation reserves to be able to make these payoffs.

It also makes me aware, and now you, of how little they are actually paying back, to the tune of 12, maybe 14% of the original loan amount, is what I read this morning.

So, yeah, they are being penalized and the GSE's are getting some reimbursement. But, as I've said before, the people, as in We The People, are paying for it all in the long run anyways.

Yes, I don't want the large banking institutions to get away with what they thought they got away with. True, but it all trickles down to you, me, and the infamous lamppost who pays for their poor behavior in the past. 


Okay, I'll get off my soap box now.......

Tuesday, October 29, 2013

Property Taxes ~ Informational or Need to Pay?

Every time I work with buyers I remind them about their property taxes. Quite frequently during the disclosure process, escrow paperwork, and of course the initial contract writing.

So far, so good. I'm pretty sure everyone is taking care of their property taxes on time. Pretty sure.

First half is due in November, late in December. Second half is due in February, late in April.

Escrow pays the taxes due from the seller and the buyer at close. Sometimes there are supplemental property taxes due. And sometimes, it takes forever to get that bill to you.

This quickie blog post is just a timely reminder that the tax assessor may take a while to reassess your home after a sale, but they add hefty penalties if they have to wait for your payment. Hefty I tell you!

So, when you get your bill, pay it in a timely manner. I also suggest to new home owners that when they get one that says 'Informational' on it, give a shout to your mortgage lender...just to be on the safe side. Make sure there's enough money being impounded in there the first time round and that the bank is truly paying the taxes.

Remember, the assessor does not like to wait and charges tons if you are late!

Friday, October 25, 2013

Since Some Are Still Wondering....

Don't be too skeptical about the housing market rebounding. It really is!

The number of US Mortgages Going Unpaid = 4,594,000! Seems like a lot? Nah, it's only just under 6.5 % of all outstanding mortgages!

Unfortunately the east coast, again I say - The Judicial Foreclosure States -, are where the highest numbers of foreclosures still remain.

Pretty & perfect weather California, with some of the highest values in Real Estate, is non-judicial and the numbers are reducing.

Home loan rates are still very low. 

Housing prices have gone up but I sure don't expect them to go down in the near future!

There are plenty of loan programs out there ~ get on board the home buying train I tell ya!

Tuesday, October 22, 2013

What Are Solar Panels Worth In Real Estate?

I'm always trying to find some good tidbit of info to share with my blog readers. I want to thank our broker at Realty Executives Valencia for forwarding to us a couple answers from appraisers when determining value for a home with solar panels.

Cut and pasting so I make no excuses for typos, spelling, nor grammar errors:

Appraiser #1:

So the question is...can/does a Solar Panel System add real value.
As an active/licensed Appraiser I have come across many sales/refi's with solar panels. And have found its market value effect is primarily influenced by the Lender. In the case of a home with Leased/Rented panels, there is no way for an appraiser to specifically add value for this feature..like we would for a Pool or extra Bathroom, even though "permanently attached" to the structure and then considered Real Estate, not Personal Property, the unit ownership still belongs to the solar company and Could be removed, and possible resulting damage to roof. If however the Solar panels, were purchased and owned, the property could/should easily sell for more and typically the appraiser could/should appraise the property at our highest end of comparable range, really without any drama. In a perfect world, we would find another similar home (paired sale) that also sold a bit higher due to solar panels. A buyer would love this feature, and an appraiser wants to give it value, within the guidelines of the Lender making the loan. When asking this question, just imagine being in the Lenders shoes, if the borrower defaulted, and lender takes the property back, if rented, they would lose that security, but if owned outright it would stay attached add could add value to the next buyer.
 
Now, the next question would be...so what's a professional Solar System worth ? Good question...its really not set in stone yet. It appears every system is different and some are more like 100% effective, and some less useful. And there does Not appear to be any industry standard Rating system developed yet. There are more accepted price/value criteria for say a pool or extra bath but solar systems are newer and no accepted norm has really been established yet. I can say I did a Refi in Westridge area home in the $800's and the owner spent $60,000 on a purchased solar system and I bumped up final value by $50,000 - as it fell within my comp range on these larger homes. There is No accepted formula, derived from their cost savings. The newer appraisal format and reporting specifically asks the appraiser to comment on energy efficient items but does not have an accepted way for the appraiser to specifically add a value, I would expect this will eventually change but for now we recognize a buyer is paying more but without another paired sale comp with same feature selling higher the best we can do is appraise it at the top of the Sale comp range.
 


Appraiser #2:  

This question is coming more often, So my answer may start changing,
But currently, paired sales analysis is not showing any contributory value ( Yet) for solar,
 In fact, due to the contract that must be acquired in most solar home and the continuing power bill most home receive due to limited panels buyers are currently not paying more for a solar home, and may even have an adverse effect as most monthly payments are around $150- $200.
In Santa Clarita we are seeing a large influx of Solar new construction and existing dwellings so we may start to see some market driven value for solar soon.
 
 Hope that helps.
 
FYI: If you can find two homes alike in same tract, one with solar and it sold for more then that would be the contributory value for solar. But can never say for every neighborhood, that is like views and pools, different value's for different areas.




Friday, October 18, 2013

Wanna Be a Dare-Devil House Flipper?

We all know there have been a lot of flips in the market over the last few years. Homes bought for really dirt cheap, rehabbed, then sold for profit. Most of those seemed to be the below 300k range homes. Bought for a little over 200k, kitchen, baths, painting done (hardly ever the landscape though), then resold for just a smidgen under 300k. Yep saw quite a few of those.

Now, it appears, the higher end market has been a little more primed for house flipping. Think Million Dollar Listing Los Angeles. And, for the last couple of months, out here in the bedroom community of Santa Clarita, the market over 700-ish was pretty stale. I do, however, see it picking up a bit again.

So, let's say you want to make more than 25k. You want to make 500k, well how about just 150-200k? You will need to find the higher priced flippable (is that a word?) home.

And, yes, they are out there. They are being aggressively approached as well. The house flippers are sending letters, making calls, popping e-mails to the owners and agents for those stale 700-ish homes to see if they want to sell for cash.....for significantly less than market value.

Surely they have been able to convince a few, more than a few likely, home owners to take the bait.

Look for some to come back on the market. Expecting them in the Spring of 2014.

But if you want to be that Dare-Devil as well be prepared to cough up some major cash, have a huge investment....and be financially able to hold for the next few months.

Are ya that kinda person?


Tuesday, October 15, 2013

Are Home Equity Loans Going To Be The New Wave Of Home Lending?

Now that the equity of many home owners has risen since the lowest levels of 2009 will we start to see HELOC's (Home Equity Line Of Credit) coming back?

Refi's were rampant with the equity increase and the low rates. That has slowed down significantly with the rise in mortgage interest rates.

Yet, the thought of a 10 year interest only HELOC is probably pretty tempting to a homeowner that has seen a nice jump in their homes' value since purchased in the last few years.

Needless to say, 'Proceed With Caution!


Many will be happy that they have the new found equity. I can only hope that we don't get into the cheap money, spending spree, take it out of your house 'bank' like we did in the years preceding the housing bubble bursting!

Be careful homeowners, thing long and hard before you use your house bank yet again.

Friday, October 11, 2013

Sellers ~ What Are You Going To Do As Inventory Climbs?

Inventory is climbing. We expect it to continue to do so, yes? Of course.

This is just a quickie reminder to sellers that the days of overpricing a nasty home are going, going, gone!

The market is settling down. So what does that mean to a seller when they decide to sell their home?

It means you better be ready to get real. Best be ready to do some staging, hire an agent that can tell you where to put what piece of furniture in which room. What rooms to focus on. How to get the most bang for your buck. You know, the stuff we've hardly had to do much of for a while.

Well, quite honestly, I've always suggested to my sellers how to prep their home for sale. My favorite line? "You gotta pack it anyways." That seems to help.

When the inventory becomes higher, there will of course be more competition. You can prep your house all you want to look it's absolute best.

Will that make it sell for more than it's worth? Should you list high and bring it down? Well, from almost 12 years experience.....I say a big NO NO NO!!!

When we settle down into a more normal market....and we all know we're getting there....the most important thing you can do to sell your home is list it for the right price immediately upon deciding to sell.

Don't let your neighbors or family sway your good judgement. Don't let a greedy agent tell you your house is worth more than it is just so they get your listing then beat you up week after week to get price reductions.

I've had about 1/2 dozen stale listings in my dozen years of selling Real Estate. Stale listings...I'm unloading one now. First one in many years of course. Thought the sellers had some sense but listed too high. Then it's been a fight to get them back to reality.

It's not worth the fight. 
It's just like a stale piece of bread when you list too high from the get-go.
Nobody really ever wants it....
unless you drop the price so ridiculously that someone will find a use for it!



Tuesday, October 8, 2013

Seller Completed Disclosures

When selling a home, the seller is required to complete a bounty of disclosures regarding the property.

In reality they are to indicate what items have been completed recently, what problems they have had. Items repaired by insurance. Lawsuits. All kinds of good stuff. It's important as a buyer to know as much as possible about the home they are buying. Who better to tell than the seller, right?

When I list a home for sale I usually wait until we get an offer in and then sit with the sellers while they complete the disclosures. If they have a question, I'm right there to make sure they complete the legal documents in their entirety. The longest I sat with a seller on this was 4 hours! He had a lot to write down.

I wait as things may have changed from list date to contract date and these disclosures should be as accurate as possible.

I always tell them 'Disclose, disclose, disclose'. Never hide anything as it may bite you in the butt later on.....when you least expect it!



Now, the hardest part is when I'm representing a buyer. We get a whole different type of disclosure packet from every different type of seller working with all kinds of agents.

You can definitely tell if the seller read them, asked questions about how to complete them, cared if they were accurate or not.....and if the agent just highlighted the spots for initials and signatures and dumped them at the sellers door. Oh, yeah, you can tell.

But what do you do in that instance? You can go back and forth and continue to ask questions of seller. Yes you can. That's your right as a buyer. Any questions you have, you can ask.

Keep that in mind when selling or buying a house. Disclosure correctly and eliminate future problems. Ask questions to avoid future lack of knowledge.


Friday, October 4, 2013

Friday MLS Stats for 10/4/13

Santa Clarita Valley ~ Awesometown to some....just home to others.

How many homes are moving in the last 30 days? What shows up on the MLS I can share. New homes don't usually hit the MLS, and trust me, there are some new homes moving.

Active ~ 568 total
Only 40 are Short-Sale
And, only 17 are Bank Owned
Just about exactly 10% of the market is distressed sales.

The deals were a year ago....those are gone,
 unless you're in a judicial state waiting to pounce like a vulture!



Pending/Back-Up ~ 619 total
265 are Short-Sale
Again, the number 17 is what hits for Bank Owned

Sold in the last 30 days? ~ 299
SS = 49
REO = 12

So, we are at a two month supply. We are seeing  price reductions. I am seeing a lot of my networking groups sharing staler listings. You know, the ones that haven't sold in the first 2 weeks? Yep, I've got one of those too!

At any rate, that's the latest numbers for our SCV. I believe the number of homes sold in last 30 days is a little less due to the hike in rates scare we had a couple months ago.

Questions, comments? Have at it!

Tuesday, October 1, 2013

More Big Moolah To Be Paid to Freddie Mac

Citigroup is coughing up 395 million to Freddie Mac to settle potential future repurchase claims on millions of loans sold to the GSE in the last 10 years. Citi has that 395M in their existing reserves for just such an expenditure.



This agreement handles claims for misrepresentation on 3.7 million loans sold by Citi to Freddie.

Any loans not covered by this pay-out Citi says they still have enough in reserves to handle them.

Apparently Citi is one of the few banks that have reached an agreement with the FHFA over allegations of misrepresented loans sold to both GSE's.

I suppose if more would cough up the cash for crappy loans, the GSE's wouldn't be asking for that 1.7 bailout from the rest of us.


Saturday, September 28, 2013

578 Today

Missed my Blog writing yesterday! Well, don't shoot me I went to see Keith Urban at the Hollywood Bowl last night....much more fun!

But, today I checked our growing inventory of homes in the lovely community I live in. 578 active listings today. Obviously steadily increasing.

Delinquency is falling, it's the east coast states, the non-judicial states, that still show the highest delinquency. Understandable.

At any rate, I believe we are going to have a slow fourth quarter in sales. Not frozen, just slower than the first 2/3's of the year.

But, anticipate a boom of sales again in the Spring! 


You okay with that?

Tuesday, September 24, 2013

Again With New Homes

Yes, I wrote a post ~ or was it a YouTube ~ about new home construction in Santa Clarita. We have several builders having a ball out here. And they are making some moolah.

I like it. If new homes are being purchased, old homes are being sold. The more for sale, the more people can buy while prices and interest rates are reasonable.

New homes out here often come with some extra property tax, so please make sure to ask about Mello-Roos, CFD, Landscape Maintenance....on top of any HOA's of course.

Lennar and KB, a couple that definitely build out here, have their stocks rising since last year. Good. Lennar only about 3.5%, KB, yowza, about 90%!

New home construction requires more employees. Good again. I love seeing people working, don't you?

At any rate, just a quickie to remind you that Lennar and KB are making some income, building some homes, employing some people, and creating re-sale inventory as well.


Friday, September 20, 2013

Foreclosures In The Pipeline?

A while ago I ran stats for foreclosures in Santa Clarita Valley. All areas of SCV and all stages of foreclosure. Notice of Default, Notice of Trustee Sale, and Foreclosed upon already. That number sat, for a while, at around 2000. If my memory serves me correctly it was about one and a half to two years ago.

A new buyer, looking for a deal, to buy, live in, fix up and sell is what prompted this post. Of course they want to make money on the deal. In SCV of course.

I told them that deal was a year ago. It's hard sometimes to be honest. To tell the truth as that persons bubble bursts a bit.

I did say if we could find the 'dog' of a property that no one else wanted, then maybe. I also talked about sitting on the courthouse steps at auction. They do not have that kind of liquid cash.

I did run the foreclosure stats again today for them. That number is now at 869, less than 1/2 of when we had a ton of short-sales and REO's on the market.

One of them thinks we are going to get a flood of foreclosures hitting the market again in 2014. That the banks are holding them. I explained that California is a judicial state....there really isn't a delay in foreclosure like in, say Florida, where the judge has to approve the foreclosure.

Now, I'm not saying it wasn't a total mess a few years ago, but we've been clearing them out in the last couple and our inventory of active listings is less than 10% of distressed properties compared to just even last year where 3 times that many were distressed.

So, although I can't make any guarantees, I don't expect that 2014 doom to arrive here in California because there just isn't that much in the pipeline.



Equity is up, delinquency is down. Banks DO NOT want to own homes. That's why there were soooo many short-sales vs. REO's in the last couple years.

Just my opinion....based upon fact....not hype!

Tuesday, September 17, 2013

What's Gonna Happen When All Those Un-Employed Kids Get Jobs?

Yeah, yeah, yeah, we all know the Real Estate market is recovering. We also all know that there's a lull right now. Knee-jerk reaction to several things. So I don't need to discuss that!

Thought of today ~ eventually the job market is going to improve also. All those kids that are living with their parents? The ones that graduated college, with a degree, that can't find a good paying job? 

Well, when those kids have jobs, they are going to want to do the same things we did. Get married, start a family.....buy a house!

And, when they do.....I truly wonder what the housing market will be like. Will we have built up an abundance of properties for sale? Will we have so few that the prices spike?

The prices on homes will continue to climb. Interest rates have been low long enough and they will continue to climb as well.

My wish is that all of these kids will be able to find an affordable home, 
very soon after they find the perfect job!


Friday, September 13, 2013

When The Going Gets Tough......

We all know that old saying "....Then The Tough Get Going!" It will be applying to Real Estate in the next few years yet again.

I've been helping people in and out of homes for over eleven years now. Worked through several challenging markets. Kept my head above water each time.....you know why? Because I am one of the tough ones. And, I don't just get going, I keep it going....through Thick & Thin. Ha Ha Ha, another old saying.

I read an article this morning that talked about Realtors worrying about the upcoming market. Really? We are just getting out of one of the toughest market ....IN YEARS....and they are worried about the next market?

Know why they are worried? Competition. They are worried about all the newbies that will come into our market now that it's not full of Short-Sales and Foreclosures!

Can't stop them from coming. It's part of our business. But, I don't worry. I've built a reputation for helping people. I will surely lose a transaction or two to someones' cousin or friend or hairdresser that is a Realtor now. Well, that is calling themselves one.

I commend the newbies that come on and are dedicated to a job well done. I'll help each and every one of them if they ask. The ones that come for the quick buck.....Ugh.....there will be those. They will do a half-assed job and get paid for it. That annoys me.

But, I know that I'm doing the best job for the people that put their trust in me. That I always will treat them the same way that I wish to be treated. I can't worry about competition, I have to worry too much that my clients are being taken care of properly.

So this little chickie will be going when it gets tough....just you watch me!

Tuesday, September 10, 2013

Lots Of New Homes

I've always said Valencia is the 'Town of New' and we are finally coming back to that again!

We were supposed to start the Newhall Ranch Project back in 2008...if my memory serves me correctly without looking it up. However, with the downfall of housing, and the problems with environmental issues, that was delayed. Expected to start up again in 2011. Nope. Most recently I had heard about another 18 months.

That project is a huge new home development project. To take about 20 years and mimic the master planned Valencia community.

At this time we do have several new home construction sites around Santa Clarita. Particularly in the Valencia surrounding area.

D. R. Horton up in Valencia near Copperhill. Lennar, West Creek off Copperhill as well. KB and Lennar both in the RiverVillage area off Newhall Ranch Rd. And, the newbies on the block, The New Home Company, Village Metro, off of Soledad across from the old Speedway!

If you want to take a gander at any of these new homes, give me a call, I'll be happy to chauffeur you around! Please do keep in mind that if you do want an, outside of the builder, agent representation, you must register online or go in physically with your agent.....the first time.


That's not the only new ones, just the ones I've been reading about lately!
Since a lot of us have the urge to move on from what's not working anymore in our homes, 
give me a call to go look at new construction!



Friday, September 6, 2013

Opinion ~ What Do Renters Do To Neighborhoods?

Talking with a friend yesterday about Real Estate. Should they stay in their neighborhood and remodel or should they sell and buy something in a different neighborhood?

Right away she commented on the fact that 'There are so many Renters on my street!' And, then I read a particular article this morning that generated this blogs' subject matter.

The Real Estate market had tons of investors buying up undervalued units and turning them into rentals or flipping them for profit. Due to so many homeowners losing their homes via Short-Sale of foreclosure, there have been a large pool of tenants to pick from to keep those rental units occupied.

Does a large number of rentals bring down the neighborhood?

Quite honestly, I've been a landlord twice now. The first time with two separate tenants over an 8 year period. This second time one family for the last 2 years. Did they bring down the neighborhood? Nah. Did they keep up the home the way I did? Nope. Were they friendly to the neighbors? Yes...and No.

Each person is different, each home is different, each neighborhood is different. If you have 3 rentals in Beverly Hills on a street that has 10 homes will that bring down the value? Doubtfully. People that can afford rent in Beverly Hills aren't going to let their home, albeit a rental, look shabby. There's a reason they want to live there.

A condo complex in any low income area will be quite different though. That's just a statement of fact and statistics.

But, there is also the mentality of owners vs. renters. Renters are nice people too, just they have chosen to rent instead of own. For many reasons. If they aren't keeping the home up, there are avenues to follow. But, it truly isn't the renters that are the problem....it's the owner of that rental that is allowing the upkeep not to be maintained.

Case in point. My current rental was to have the tenants take care of the rear yard. Things changed, they had another baby, he's always traveling. We decided to pay for a gardener to come in weekly rather than have our neighbors disappointed with .....renters. No, we didn't raise their rent. They have been there for 2 years and it's worth it to us to pay the small gardener fee rather than have them have to move. Besides, my old neighbors like them!



And you? What's your opinion of renters? Really, didn't we all start out that way?

Tuesday, September 3, 2013

The Adjustable Rate Mortgage Is Making A Comeback

Yep, they are on the way back in. I've been watching it for the last 1-2 years creep it's way into our lives again.

The 5 or 7 year ARM is the most popular. It's a gamble at any year. But, it can work for the home buyer that is only going to stay for a short period of time.

I heard quite some time ago that most homeowners only stay for 7-8 years. I've yet to see that stat play out with my clients. For those that fit that pattern, an adjustable rate mortgage may be perfect for you. As long as you are still paying off your principal.

But do your math, calculate YOUR odds, make sure it's right for you or the bet you hedged may cause a larger loss than you can afford.

Current rates for the 5 year is 3.75, the 7 is 3.875. The 30 year fixed is hovering around 4.625. What's the difference in a mortgage payment?

Easy example:

500k loan at 3.75 = $2350.00

@ 3.875 = $2460.00

And, at the traditional 30 year fixed current rate of $ 4.625 = $2645.00

Is 300/month worth the risk to you? If you know for sure you're moving before the loan needs to be refinanced it's a great way to save some cash. But, if you're just trying to squeeze into a more affordable payment, it may be to large of a risk for your future.


Friday, August 30, 2013

Interesting Stuff I'm Supposed To Be Aware Of For Future Buyers

Homes that are pet-friendly. More so than now? This particular article suggests that, and we know this from Facebook posts, peoples pets are really part of the family. Well, weren't they always?

Prepping homes to be self-sufficient. Okay, I get that. More conservation in the home. Places that have enough space for a few fruit trees and vegetable garden. It still depends on where you're buying and what type of buyer you're working with. Trust me, my husband could care less about a vegetable garden! But, I do love my peach and nectarine trees!

This one I totally agree with...so agents, be aware! Electric cars. At some time we will have more and more of them. So? Well, homeowners are going to need someplace to plug them in, yes? Yes! And, they are going to be aware of energy consumption in the home they are looking to purchase. It's going to be important. If you can name a Solar Company that will get me some panels, that if the next buyer foolishly doesn't want them, they will take them away? I'm all over that!

This one I'm not quite sure it will target the masses. Collaborative Consumption. Making sure there is some way they can actually earn a bit of moolah off their homes. Whether it is by renting a room out or by establishing a home business of some sort. The home biz? Yes, get that. The renting of the room? Don't think most peeps are thinking about that when buying a home. 2 in the last 3 years of mine did. Just 2.

At any rate, I found it interesting. And, wanted to share with you and get your thoughts. 
Would love to get some comments on these future buyer desires!

Tuesday, August 27, 2013

Trumped the Trump!

I just thought this was too funny!

Donald Trump started a Real Estate 'University' ~ I did not know!

What I now know is that the NY Attorney General filed a suit against Trump as the school did not provide what students were promised.

Students were told they would learn The Trumps personal methods which, of course, would practically guarantee they would have fantastic success in Real Estate investments.

Trump is denying that he did not deliver as the men and women were told he would. Apparently the students were told to increase their credit card limits to participate in the 'Elite Mentorship Program'....to the tune of between 10 & 35k.....well, they didn't know that's why the suggestion was made until after their limits were increased.

On top of that.....it's not really a University now is it? Trump was supposedly hand picking and training the instructors. So he said. The AG determined that he was not involved in the curriculum nor did Trump actually pick the instructors.

Regardless, that old adage...Too Good To Be True? I'd say it fits this one!



Friday, August 23, 2013

And, We've Made It Over 500 !

Acton, Agua Dulce, Castaic, Newhall, Saugus, Santa Clarita, 
Valencia, Val Verde, Stevenson Ranch.

Since most people looking in 'Santa Clarita' seem to consider all these neighborhoods SCV, this is what I include in my searches.

ACTIVE Listings ~ 520.....been a very long time since we hit that number!

Pending/Back-Up ~ 690......that number is shrinking as we get through any Short-Sale back-log.

SOLD in the last 30 days ~ 362

Nope, I didn't break it down for what type of listing/sale the property is. We all know that we have tipped significantly over to Standard Sales.

So, now the question is, how much harder do sellers have to work to get their home sold? Yes, I said sellers. We as agents can only tell you what we suggest you do to present your home in the best possible light. It's up to you, the seller, to listen to our expert advice.

After all, we sell a helluva a lot more houses than you now don't we?

Tuesday, August 20, 2013

Some Buyers Are Going To Be Let Back Into The Market Pretty Fast

Seems like if you did a short-sale, foreclosure, bankruptcy...you'd be an unlikely candidate for repurchasing a home in a year, right? So you'd think.

FHA has now shortened the waiting period for those very same buyers. Yes, of course, there is one caveat. You must prove that you had a loss of employment or a loss of income that was 'beyond your control'. And, it has to be an income loss of at least 20% and lasted for at least 6 months.

Of course you have to prove that you have completely recovered from the loss that caused the hardship. Meaning, since you can repurchase in as little as 12 months, you have to show that you've had a good payment history on things like mortgage (swear it says that), rent, or credit accounts.

Funny, since most borrowers have to show solid employment for 24 months, right?

Well, it is what it is. And, buying with FHA comes with permanent PMI these days, unless you can refi out of it into a conventional loan in the future.

This new goody actually went into effect 8/15/13 and continues through 9/30/16.

Is this a goody, or is it a baddy?





Friday, August 16, 2013

One Lucky Family

Every once in a while I am amazed by a super smooth escrow. Usually there are glitches along the way, kinks to be worked out, but this one closing today is my smoothest of the year!

Great young family about to make Santa Clarita their home. And, I couldn't be happier for them!

They were referred to me by someone I've known for about 20 years. He knows my OCD tendencies and surely felt I'd care for them very well. And, over-explain everything to them too!

We had talked on the phone a few months back, a couple of things to work out on their FICO scoring. So motivated they were, it was cleared up very quickly.

Mr. Buyer had a poor experience years ago with an investment property. That was a big glitch, and surely must have created a bit of apprehension going into this purchase.

Only once in my eleven year career has someone found their home on the first day. That one, we found it, but looked at 75 more homes before we came back to it! No, not all in one day silly!

This family? First day out. Found it, loved it, slept on it, wrote an offer. Luck One.

We were a little leery as most homes were going out with multiple offers. So we wrote just a bit over list price. Several other agents were threatening (we jokingly call it that) to write an offer, none did! Luck Two. Their offer was accepted.

Inspections, disclosures, loan process. A.O.K. Some items came up on inspection, buyers were willing to accept a credit in lieu if repairs. We asked for two moons! Received the one we wanted. Luck Three.

Mrs. Buyer had to investigate schools, neighborhood, crime history. All came up smelling like roses. Luck Four!

I kept asking them, before we removed contingencies of course, 'Are you sure you want to live here?' Poor guy, I must have asked him 1/2 dozen times in a few weeks.

I could probably keep going with the luck of these kids (they're younger than me, so dang it, they're kids in my book), but just today we asked if seller was leaving something at the property. Luck Five.....yep, they sure are!

I've got to call escrow in a little bit to see if we've officially recorded into their name yet, but this really is One Lucky Family and I'm very happy that they trusted me to help them through this process.

Today is going to be a very lucky, and wonderful, day for them!
I feel so fortunate to have had the luck to work with them!



Tuesday, August 13, 2013

America Loves the 30 Year Fixed Mortgage....Or Do We?

We've had it around forever. We left it a few years ago....and look what happened. We better start showing it some love again as it's likely to be the best bet for our lifetime.

Realtor.org has a blog section. Helps me to go to one place and find lots of interesting information to share with my own blog readers. That, plus about 8 other Realtor/Real Estate/Mortgage sites keeps me pretty informed.

Today was reading about the 30 year fixed mortgage. When money was cheap, we took another lover on....the Adjustable Rate Mortgage (ARM), as we could get money even cheaper.

Again, look where that got us...all that cheap money. Just like a cheap whore....a lifetime of trouble, if not dealt with carefully.


Now, interest rates have been extremely low for several years. They will go up, we all know this. Those with ARM's will possibly wish they had a lovely pure 30 year fixed. Those with a 30 year fixed that originated in the last couple of years are likely quite happy.

The 30 year fixed is a great loan....because....it's fixed, you always know what you're getting when falling in love with her.


Friday, August 9, 2013

How Severe Should The Penalty Be?

Happy Friday August 9th! It's a beautiful day outside, Real Estate is recovering. Clean up is still going on for any scoundrels that took advantage of more people that put their trust where is shouldn't have gone.

Four men from my home state of California were sentenced to jail for mortgage modification scams. These creeps defrauded normal 'Joe's' out of about 130k by asking home owners to put their trust in them.


Unfortunately many innocent home owners did do just that. These men set up several false businesses and changed their names, phone numbers, and addresses to escape the calls of their customers and to continue their scams!

Cunningham, Silva, Koelle, Nolan....they all pleased guilty to felony counts! All of them. But, really, they only face 6 - 8 months in jail, 5 years probation, and giving back the fees to home owners.

Hmmmm, I think it should be more harsh. I think they should be in jail for longer and NEVER be off probation. But, maybe I'm a little harsh?

I know there are far worse crimes out there....but really, just doesn't seem like punishment enough.


Tuesday, August 6, 2013

Another Bank Has To Pay Up To Fannie & Freddie!

UBS Americas Inc. has agreed to 885 million settlement over bad mortgage bonds sold to Fannie and Freddie during the subprime boom a few years back.

They are the 3rd, after General Electric and Citigroup Inc, to settle with FHFA over bad bonds sold to Fannie and Freddie.

Again, GOOD, I say! Fannie and Freddie was bailed out by our government back in 2008. We, the taxpayers, are ultimately taking any loss. So, if they get screwed, we get screwed.

470 million is going to Freddie and 415 million going to Fannie. Just a drop in the bucket. But the more drops in that bucket, the fuller it will be!




Friday, August 2, 2013

Should Sellers Worry About Rising Interest Rates and Increasing Inventory?

I'd say Heck Yes! Well, our inventory is still ridiculously low for what we consider 'normal, healthy' inventory numbers but with the rampant gouging of home buyers the first 6 months of 2013, I'd say give the sellers a little bit to worry about so the astronomical increase in pricing drops down to a more 'normal, healthy' appreciation.

If you're a home owner considering selling, yes, you should worry a little bit. Not tremendously, but don't put your head in the sand and say 'What, Me Worry?' Be educated, cautious, and careful.


The market is making yet another correction. Be aware of it. Make sure you are looking at the latest comparable sales when pricing your home for sale. Pay extra special attention to your current competition. That competitions number of days on market and price reductions in your neighborhood.

Something that should always be brought to a sellers attention, well until the first 1/2 of this year where a seller could toss it on the market and get multiple offers and all cash investor offers too!

Investors are finally disappearing from the market. Good for buyers, not as plentiful of offers for sellers.

Don't lose sleep over it, but don't be stupid with your list price. 

Tuesday, July 30, 2013

May Be Able To Get FHA Loan in Non Approved Condo Complex....Maybe

Any FHA buyer that was looking for a condo or townhouse in the last couple of years has really struggled. More and more condo complexes lost their FHA certification. And, that made it extremely hard for a home buyer and much easier for an all cash investor to buy the units for sale.

Some buyers were able to bump up to 5% conventional financing. But even then, not all complexes would allow a 95% LTV due to other underlying concerns. Not enough in reserves, too high of a rental to owner-occupied ratio.

But, FHA has proposed a 'Workaround' to some of the problems with re-certification for FHA approval on a condo complex.

The National Housing Act regarding 'transient' , or short-term rental of units, language in the certification has created part of this problem. And, FHA is considering a solution to this dilemma. The HOA boards can either amend their CC& R's, an extremely costly and time consuming endeavor, or provide a statement that confirms there are 'No units in the project currently rented for less than 30 days and/or pursuant to the lessor providing any services normally associated with a hotel'

Now, not saying that will correct every situation by far. As, with any one group or person, no one really likes being told what they have to do. But, FHA was meant to help people get into homes. Their certification, and re-certification, process has been hindering a lot of the potential condo home buyers...the ones that FHA was set up to help....so here's to hoping this is a step in the right direction of re-certifying local complexes for FHA buyers!









Friday, July 26, 2013

Just What is Full Recovery To You?

The article I read this morning that prompted this post was "Five More Markets Reach Full Recovery in May"

Well, then it continued to talk about the recession. And, which parts of the country have reached full recovery, which have rebounded more than 200% since the 'recession'.

Okay, in 2005, 2006 house prices were ridiculous. That's it, I'm saying it....out loud! A townhouse was over 600k, a single family home was 800 +. Really? That was crazy. I bought then. (I'm my own worst client ~ I see it, I want it, I buy it)

So then the market crashed. We knew it would, just not to the extent that it did. But, even though a lot of people lost their homes, or people chose to walk away, prices certainly became more reasonable. The average double-income, hard working blue collar people could actually buy a home.

Well, it is what it is, we have been working through all the underwater homeowners, the short-sale, the foreclosures. So, of course, we have nothing to do but RECOVER!

I'll stop spewing and ask a question instead. What is full recovery to you? Do you think home prices, right now, should be where they were 6-7 years ago? Or do you think we should just start with some normal appreciation, slow progress to higher prices. Slow progress so that we can continue to allow the possibility of home ownership to the people that may not make 200k per year, the ones that between the two bread-winners make significantly less?

I believe everyone that works hard, saves their pennies and are genuinely good people deserve the chance at home ownership. But, again, where does this recovery have to end up to have reached full in every market?


Tuesday, July 23, 2013

When Will They Learn???

Really, I can't believe I even read this today. Mortgage broker giving bonus' to their loan officers if they convinced the borrowers to take a higher interest rate loan. I'm just appalled.....disgusted, and so glad they are getting their 'due'! The CFPB sued the heck out of them!

I really don't understand how someone can think they are above the law? And, how they are so willing to hurt someone's livelihood just to make a few bucks.


Yep, it really pisses me off!

Brand new client, first time home buyer, came with his own lender. I spoke with lender several times, seems to be on the ball, good staff, very responsive to calls and e-mails. The buyer called me and said the lender offered him two different interest rates, only an 1/8% difference, and if he took the higher rate the lender could give him 2500 towards his closing costs. 

So, in the above instance, is the lender getting a bonus? I honestly don't know. But, the buyer was smart enough to ask my opinion...yes, I'm full of opinions. I told the buyer what I know. If the mortgage broker gives out a higher rate than what buyer qualifies for, he makes more money. Of course it costs the buyer more money in the long run too. But, as long as it's discussed with the buyer and he makes an informed decision...I'm okay with that. 

However, if the buyers are just being shoved into higher rates with some B.S. reason....I'm sooooo not OK with that! 

My buyer, after the two of us put our heads together and did the math, 
chose the lower rate....I'm so proud of him......