Statistically agents are doing a good job of selling their own listings.    As they are hired to do by the sellers.  

I like to give my buyers an example that illustrates why a buyer might prefer to hire an agent who works at a company that does not represent sellers. i.e. a Buyer's Broker.

Assumption: if a buyer were to be looking at properties with an agent who is not steering his buyer, particularly, to any of the company sellers, then the chance of finding his favorite property listed with his agents firm should equal the % of the listings held by that firm.  Right or not right???

So XYZ Company with 15 % of the inventory should be selling, statistically speaking,  15% "in office".  But that number in a real life example is close to double that number.  Some of the overage is sign calls or ad calls.   I can't prove it but, would it be a fair assumption that some of the buyers who hire Dual Agent Realtors, to find the best house, are being guided toward choosing a company listing - an acceptable house - but, statistically speaking, not the best house.

Next example: As of  the last  10 months  in Fargo Moorhead board of Realtors,  about 1 in 7  of transactions were involving the same firm handling both sides.     There are 80 firms on MLS.  It would seem to me that randomness would cause an in house transaction about 1 in 80 - not 1 in 7.     I don't know how many you throw out of the equation because they were direct sales from the sign or the advertising.  In fact the statistics compiled by the board of Realtors are saying that at the end  of the day, In-Office sales were running at 1 in 7, which means the vast majority of those deals, put a buyer, statistically speaking,  in the  wrong house.  

We are looking for hard working aggressive Realtors who want to focus on a huge underserved niche market:Buyers

The Problem: Agents who specialize in buyers exclusively are hard to find because the income potential is decreased.

Downside:

• They will be giving up all potential seller business to become exclusive buyers representatives. 
• -No more double sided transactions nor any extra bonus for selling a company listing.
• They will not have their name on property signs nor have personal inventory.
• They will not be saleperson of the month or listing person of the month. 
• They will have to go out and talk to people, sell their service, and bring in business the old fashioned way

 

Upside:  

• They will be number one in their buyer client's heart.
• They will never be involved in Dual Agency nor have a conflict of interest with a seller
• They will not have to change horses and sides multiple times a day
• No sign, key box, or open house hassles
• No ad deadlines, no stolen signs, no expired listings, no frustrated sellers.
• They will have a message that has no equal:  Buyer gets the right house; Best Possible Terms; No Conflicts of Interest; Dual Agency-Forgettaboutit 

Should we expect many calls?  I will be surprised if there are any agents in our market who can afford to be an Exclusive Buyer Representative.  Dual Agency, while it is not much loved, does, for many agents, pay the bills.

 

Becoming a homeowner not an impossible task

Between the economy and the real estate market, becoming a homeowner may sound like an impossible task. However, loan options exist to help you work around your financial hurdles. If money is tight, an FHA loan may be the key to unlocking a new front door. FHA loans are available to people with lower income levels or tight credit because the Federal Housing Administration promises to pay lenders back if you default on your loan. That way, lenders know they’re covered, and they can prepare more mortgages. Anyone can apply for an FHA loan since they do not have a maximum income level restriction. So how do you know if an FHA loan is right for you?

• You’re looking for a smaller home: FHA loans are generally small and are based off of each area’s typical home prices. Certain counties also have loan limits, so if you’re looking to purchase a larger or pricier home, you may not be able to do so.
• You have a tight financial situation: FHA loans cater to those with lower income levels, higher debt ratios, and little credit (or even none at all). Even if you have had a foreclosure or experienced bankruptcy, you can still qualify after 2 and 3 years, respectively.
• You need some pocket change: FHA loans have minimum down payments of 3.5%, which is lower than that of conventional loans. You can finance up to 96.5% of your purchase price while still enjoying this small down payment, allowing you to purchase sooner.

North Dakota FHA loans help you save money in other ways as well. Closing costs are regulated by the Department of Housing and Urban Development, keeping them low, and mortgage insurance premiums (MIP) are 1.5% - low as well. FHA loans’ interests rates are generally the same as those of conventional loans, and you will have 12 monthly payments of .5% of your loan amount. If you are living in a rural area, a USDA home loan may be a good fit for you as well. USDA loans are also meant to benefit low-income individuals and households, but unlike FHA loans, they do have income level limits. Some of the other USDA loan benefits include:

• No down payments
• Loans can finance 100% of the cost
• 30-year, fixed-rate mortgages
• No mortgage insurance required

If you want to purchase a home of your own, the government has created loan programs to help you do so. Don’t let this housing market bring you down.

FHA Mortgage Loans Today for readers of Dan Deutsch' Active Rain Blog

FHA loans were made for times like this.

by Brandon Laughridge Online Content Director brandon@mortgageloanplace.com tel: (573) 445-3426

The Federal Housing Administration is backing mortgages at a record rate in light of the lingering recession. FHA loans have been attractive to first-time homebuyers and low- to middle-income families for more than 70 years. Today, they�re more popular than ever, as prospective homeowners are turning to FHA loans because of their flexibility and minimal costs.

One of the biggest advantages FHA loans have over conventional mortgages revolves around qualification and credit. The national economic climate has only tightened the credit market and forced mortgage lenders to re-evaluate their underwriting practices.

FHA loans make home ownership possible for scores of Americans who might not otherwise qualify.

The FHA does not use a credit score as a program qualifier. But the agency also does not issue loans � it backs them. That ultimately means that the lenders who work with the FHA may take an applicant�s financial history into account.

Prospective buyers without sterling credit can still qualify for FHA loans in this climate. Buyers with scores as low as 620 can obtain favorable mortgage rates on an FHA loan. Many traditional residential lenders now won�t consider applicants with credit scores below 680.

Credit score, overall financial health and down payment can all impact the mortgage rate on an FHA loan. These minimal-cost loans require only a 3.5 percent down payment, but prospective buyers with good credit and a double-digit down payment would only help to improve loan terms. But buyers with spotty credit can still obtain a home loan with slightly above-average rates through the FHA.

Homebuyers should keep in mind that the FHA has mandatory loan limits depending on where your home is located.

With a conventional loan, some prospective buyers with excellent credit can obtain lower rates than an FHA loan can provide. In general, conventional applicants need a score of at least 640 to be considered for a traditional conforming loan. But those looking for the best rate available on a conventional mortgage should expect to have a credit score of at least 740.

It seems less and less possible to estimate a payment anymore.   My favorite lender emails me a list of rates daily - nice little chart with VA FHA and Conventional.  5% Conv seemed awesome compared to what I expected.  So I called Nate and asked who gets 5%....?   It turns out that 5% goes to a single guywith perfect credit, huge down pmt, and a 30 day lock in.  What about 60 day lock... that's 3/8 of a point more.  What about 90 day lock....that's  1.125 points more.  What about 15% down pmt...that's a higher rate.... What about 10%, 5%, 3%....more more more.   What about 800 credit score?  Well that depends.... are there two borrowers?   There are 3 scores for each borrower.  They take the lower middle score of the two.   The rates go higher every drop of 20 points.   And higher.   And higher.  Well what about FHA.   Well that follows the same trends but with different assignments of rates and a different criteria.  What if my lock expires?  What if the appraisal is low?  What if I switch lenders or switch locks in mid stream?  Are rates higher or lower if I live in Peoria? Or not.

What is a "special assessment"? A Brief Description: A special assessment is a charge for the cost of infrastructure and public improvements such as streets, sewers, curbs, gutters, sidewalks, bridges, and waterlines.  The costs are assessed to properties that will benefit from an improvement project. So in some ways these misunderstood and barely disclosed surprise assessments aren't special....they are horrible. New homes are built on lots which have all new infrastructure.... those costs are in addition to, on top of, the price of the house.  In the FM area lots are usually assessed about $300 per running front footage of the adjacent street.  It varies based on the bids, interest rates,  and FRONTAGE width of the lot - not the SIDE length on corners.  Corner lots are NOT usually hit for extra. Other areas of the country often require the developers to pay the cost in advance and recover it by raising the cost of the lot.   This is a better way to disclose the price of a house.  But if developers were not able to afford to put in streets and sewers then there would be LESS development, FEWER homes, and a resulting higher demand.  Homes would become even more expensive!!!  (And that would be really, really, horrible...!!) The List Price of a house in FM area does not include the cost of the Special Assessments.  This is a BIG surprise if you are not aware of it.  It is in the listing details, however, so read to find what is quoted.   However since the amount may not be available until after a year there may be a '1' in the space to indicate there WILL be future assessments when the estimate or numbers are available.  A rough method of Guestimating what the cost will be is to figure about $200 a month on top of the property tax*. The NUTS and BOLTS Description of Special Assessments: The fee consists of principal and interest and is usually paid over 20 years. The interest rate paid by the property owner coincides with the interest rate and the maturity date for the bonds which are sold to finance the project. The process starts when the City conducts a public hearing regarding the advisability of a proposed improvement project. A public hearing process addresses the issues of estimated cost, method of assessing costs, the apportionment of costs between the city-at-large and the benefit district, and the boundary of the "improvement district".   If the petition is approved or the governing body acts on the advisability of an improvement project, the benefit district is established by the Commission through a resolution. The City then enters into a contract for construction and borrows money to finance the project construction costs. Once the project is complete and all project costs are known, a special assessment amount is calculated to find each property owner´s share of the specials. The City first calculates the total actual cost.  The total cost is then apportioned to each lot in the benefit district based on the method included in the petition or resolution from the public hearing. The most typical method assigning street costs based on the width of the lot which the street is running past.... another is to bill an equal share per lot. For example, the total project cost is $100,000, and there are 100 lots. Each lot´s share will be $1,000. Alternate Solutions:  If a property owner wants to pay off the special assessments in the price of the house purchase it can be paid with MORTGAGE Interest, which is tax deductable and spread out over 30 years.   The payment of the special assessment is not tax deductable.  Check with your accountant since I am not an accountant.   Would you rather spread the payments over a 30 year amortization which has deductible interest or a 20 year spread which has no deductible interest?  On a 20,000 assessment it would reduce the payment about $23 per month.   The monthly interest on a 6% loan would be $100 at the beginning.  If there was a tax deduction at 15% or 28% that could be another $15 to $28 to save. If you meet with us we'll talk more about how best to deal with "special assessments". *Property TAXES: In the Fargo and West Fargo locations property taxes are roughly about 2% of the property value per year.  So a $200,000 house might be taxed at $4000 per year (or $333 per month).  The last I checked with my accountant, property taxes were also deductable, but you should ask your accountant.

Equal Opportunity Housing.

Lida and I are back at it today with 5 more first homebuyers coming in for classes today, to learn about the $8000 tax credit and other things.   We took the morning to attend a Seminar put on by Wells Fargo Bank.   Free donuts and juice!!  There were so many great ideas discussed.  Here is one that sticks in our mind... Rich Casto who is an Internationally famous real estate negotiator consultant, said that it should be ILLEGAL for any qualified person, who is renting, to fail to buy a home by Dec 1, this year, and get the $8000 stimulus refund. (Tongue in cheek, I think) And furthermore he said any Realtor who knows eligible tax payers, who are renting and does not encourage them to purchase a home before the $8000 offer expires this fall, should lose their license.  I don't think he was kidding about that.  We can lose our license for a lot less trivial things than $8000.

I'm going the NAR Convention in Las Vegas in a couple weeks..... Well how many of you are going to be there? Am interested with the latest technology for mobile computing.  I'd like to be able to drive about town and have a computer, printer, internet, fax capability, blackberry/phone/email.  I'd like to be able to keep this as efficient and uncomplicated as possible.  So I'm thinking about have good workability between hardware - it all talks to eachother. Cost is not my primary concern.  My first question is what do you like about what you are using?  Any suggestions on what to avoid.

I recently got this request from a soldier in Germany reading my MLS listings: 

Hello Dan,   Can you describe the acronyms for the different types of heating systems in the area...for example listing 07-4963, EHW?

Hi Alan... nice to hear from you!.....  EBB --Elec Base Bd, EFA - Elec Forced Air - GFA(gas...) OFA(oil....) BB - baseboard, HW -hot water/a boiler of some sort), Elec is either baseboard radiant or hotwater.
EHW - elec hot water baseboard.....FA is always preceded by O E or G(gas)  Some you just guess... for example what would you guess S stands for...???? maybe Solar??? Here's one I someday hope to see, WGEFA (wind generator electric forced air)... and this one which my kid would understand - HCG - (hamster cage generator).