Do You Need a Real Estate License to "Flip" Properties?

You buy a property, you flip it, you profit. Does this require a real estate license? In most cases, the answer is "no".

Real estate brokerage is an activity regulated by states on their own terms, thus each state defines which activities require a license. There is a lot of vagueness and ambiguity in some of the state licensing codes, as well as "gray areas", which complicate the matter. Furthermore, if you vary the techniques and your business practices beyond the scope of what I teach in my course, it is not always clear how the state authorities might view your practices. Therefore, this discussion is limited to the simple activity of buying and flipping as follows:

1. Sign a contract with a seller, assign it to a third party


2. Sign a contract with a seller, sign another one with a third party, and then double close

A large majority of states use the "for another" language in their licensing statutes. The "for another" language means the law provides a laundry list of activities that require a license if you do it "for another."

Freddie Mac Home Possible Program

Effective recently, conforming lenders will accept loan submissions and locks for the Freddie Mac Home Possible program. Details for the program can be found at http://www.freddiemac.com/homepossible/ or you can check out the program matrix for the My Community and Home Possible programs on most rate sheets. You must be approved by Freddie Mac to utilize their Loan Prospector underwriting engine. You can visit their website at http://www.loanprospector.com/signup/ for details.

Personally, I think the Home Possible program is going to be a spitting image of what MyCommunity was earlier this year - a flexible 100% loan program with reduced MI and a 1pt hit to YSP.

Choosing a House that Fits You

Choosing a House that Fits You


Amongst the many things to consider when buying a home, one of the most important and sometimes overlooked factors is the actual house itself. Don't forget this is going to be the place you go home to every night, the place your kids will grow up in and always remember.

Before you start looking at houses, you need to ask yourself what it is you want out of a house. How long do you plan on living in it? Will you be living there temporarily while you save up for a better one or will this be the house you retire in? How many people are going to live in it? Will it be housing the Brady Bunch or the Odd Couple? How old is the house? How big is the house? The yard? How expensive is the house? These are just a few questions you need to ask yourself before you start looking for potential houses.

And it's not just the house you need to consider either; it's the neighborhood. A house is always part of a neighborhood and, just like a house, you need to ask yourself what you want out of a neighborhood. If you have children, you'll want to look into the local public and private schools. How are the parks and trails? What condition is the neighborhood in now? What condition will the neighborhood be in years from now? Is the neighborhood safe? How close is it to the places you need to go? Figure out what you want and then go from there.

If you have any questions about the home buying process, please don't hesitate to ask. I can refer you to a trusted affiliate of mine who specializes in your real estate market. I want to make buying a home as pleasant and stress-free for you so that you can focus on the more important things: the house and the neighborhood.

The Dos and Don'ts of Buying a House

The Dos and Don'ts of Home Buying


Do Shop Around - Don't just hold interest in one house, check out a handful. Find out about the neighborhood, traffic, schools, and local entertainment. Talk to the people that have lived in the neighborhood for some time and find out their opinions and biggest complaints. And remember that the lowest price isn't always the best deal and that some houses can be deceivingly cheap. It's better to do too much research than not enough; you'll thank yourself for years to come.

Do Get to Know Your Realtor - There's so much to know about real estate that you can't possibly know all the ins and outs of the industry. That's why your best strategy is to find a realtor whom you can trust. An experienced and trustworthy realtor will take the time to explain to you your options and walk through the entire home buying/selling process with you.

Don't Pay Too Much - This may be obvious but you don't have to sell your first born child to be able to afford a home. The price of your home depends on various factors like size, location and neighborhood. Every house is unique and has both positive and negative attributes, a skilled realtor will be able to come up with a specific home that fits your wants and needs but isn't going to cost you your first born.

Don't Rush into Things - This is your house we're talking about. Whether you're going to own it for three or thirty years, you want to make sure that you do everything right. I know you're in a hurry to move in, but don't sign the first deal you see; do your homework first.

The Dos and Don'ts of Selling Your House

The Dos and Don'ts of Selling Your House


Do Shop Around - Don't consider moving unless you have already researched the market and are financially able to purchase the type of home you want. Research the homes in your local neighborhood to see what they are being sold for and take into consideration any major repairs, additions, or investments you put into the house. It's better to do too much research than not enough; you'll thank yourself for years to come.

Do Get to Know Your Realtor - There's so much to know about selling your home that you can't possibly know all the ins and outs of having an efficient plan to sell your house quickly. That's why your best strategy is to find a realtor whom you can trust. An experienced and trustworthy realtor will take the time to explain to you your options and walk you through the entire selling process to make sure you get the most from your prior residence.

Don't Settle Too Low - You're going to be bargaining over a desirable price with the buyer, but you want to make sure you don't lose money in the process. The price of your home depends on various factors like how much time you put into making the necessary repairs, how much effort you put into cleaning and organizing the interior and exterior. A skilled realtor will be able to come up with a specific plan to make your house desirable to all parties and get you a price you are happy with.

Don't Rush Into Things - This is your home we're talking about. No matter how much time you have, you want to make sure that you do everything right. I know you're in a hurry to sell your house, but don't accept the first offer you see; do your homework first.

Don't Believe Every Rate You See!

Don't Believe Every Rate You See!


If you're a savvy consumer, I'm sure you've seen many nationally-branded companies advertising ridiculously low rates. (For example: Ditech, Quicken, etc) Despite the fact that rates have hovered near extraordinary lows for an extended period of time, many of the largest national lenders routinely tout rates that simply seem "too good to be true."

In fact, they are exactly that, at least for the overwhelming majority of borrowers. Certain nationally advertised companies also promote incredibly low closing-cost fees. Don't get sucked in, though, and don't believe the hype... these advertisements are, in fact, not credible at all.

The average consumer is typically not aware that these advertised rates and costs rarely, if ever, apply to their personal situation. Worse yet, after investing the time and energy into the loan process with one of these misleading lending institutions, consumers rarely realize the hidden fees, costs, and percentage points that they end up paying until it's virtually too late.

As a well-informed borrower, how then, can you avoid such pitfalls? Where can you find the truth???

First of all, you need to realize that every lending institution or mortgage company uses the same pool of lenders. In other words, a handful of entities control all the available money that can be borrowed, and the end result is that your refinance loan or purchase loan actually comes from the exact same source, no matter who actually provides you with that solution. So, if it's the same money, how can they charge so much less?

The answer is simple: THEY CAN'T. Many of these companies initially entice you with artificially deflated low rates and closing costs, only to "inform" you later that you actually don't "qualify" for that special promotion because you don't have a FICO score of 849.99. Or, you don't already own 85% of the equity in your home. Or, whatever...

By then, you've already invested a considerable amount of time and effort, and you want to get on with your life, so you just say "OK" and go along with their program. The result is that you actually could end up paying MORE, since you were on your own to evaluate the hundreds of programs that you may be available to you, and did not have an experienced professional really evaluate your personal situation and explain the best available options.

Your Real Estate Bill of Rights

Dear Prospective Home Buyer,

Your Real Estate Bill of Rights

1. You deserve attention to detail and specific solutions to your specific needs
   
2. You deserve access to the most accurate information regarding your status at any given moment
   
3. You deserve impeccable customer service
   
4. You deserve to be treated fairly and with respect at all times
   
5. You deserve the best possible attention and all your wants and needs exceeded
   
6. You deserve professional consulting to accomplish your short term and long term objectives
   
7. You deserve flexible options
   
8. You deserve all the information necessary to make wise decisions
   
9. You deserve truthful and accurate information regarding your real estate options, fees, rates and the effects of each piece of the puzzle to make the best decision for you
   
10. You deserve a professional that will do whatever it takes to get the job done
    
    
    
    
    As a professional realtor, you can trust that your bill of rights are the core philosophy of everyone at ASAP Mortgage.
    
    Best regards and the opportunity to earn your business is appreciated,
    
    ASAP Mortgage
    http://www.asapmtg.net
    866-276-9055
    

The 9 Things You Must Know Before You Buy

The 9 things you must know before you buy
Before putting all you money into mortgage payments, please
consider the following 9 important issues. By considering
these important financial issues, you will be able to make
your payments work much harder for you.


1. Get pre-approved BEFORE you look for your new home
Of all the steps to do before you buy a home, the
pre-approval part is the easiest. One of it's benefits: It
will give you complete peace-of-mind while you are looking
for a home. The best part, it's usually free. Your local
lending institution can give you a written pre-approval with
no obligation on your part. Getting pre-approved means money
in the bank! Being pre-approved means that you have a
guarantee of obtaining a mortgage up to a specified level.


2. Know what level of monthly payments you are comfortable with
When you are discussing your pre-approved mortgage with
your lender or your lending institution, you will find out
up to which level you can borrow. You must also pre-assess
what amount of dollars you want to spend each month on your
home without getting uncomfortable. Your financial situation
could give you a higher level of pre-approval than what you
could feel comfortable paying each month. Once you have set
that amount, you will know the price range of the house that
you should be looking for.


3. Select the type of mortgage that will best suit you
Before you commit to a certain type of mortgage, there are a
number of questions you should be asking yourself. Mainly:
For how long do you think you will own your present house?
Are the interest rates going down or up? Will your earnings
change in the near future? Will that change have any
influence on your future payments? Once you know the answer
to these questions, you should be in a better position in
choosing the appropriate type of mortgage you should be
looking for.


4. Payment frequency options. Accelerated weekly and
bi-weekly periodic payments can save you thousands of
dollars in interests payments. If you plan your mortgage
periodic payments well, you will significantly lessen the
amount of interest that you will be charged over the term of
the loan.
The best trick is the accelerated bi-weekly mortgage payment
system. You pay every second week half the amount of what
should have been your monthly mortgage payments. By using
this system, at the end of the year you will have paid the
equivalent of 13 monthly payments.
Note: Not all mortgages are of the accelerated bi-weekly type.


5. Authorized pre-payment
Another system that can greatly reduce the total interest
amount you will have to pay is the authorized pre-payment
system. By paying off a certain percentage of your mortgage,
or by increasing the amount that you pay monthly will
greatly reduce your mortgage costs. By using an authorized
pre-payment system you can have a major impact on the number
of years you will have to pay your mortgage.
Note: Not every mortgage has the prepayment option built in.


6. Portable mortgage
A portable mortgage permits you to use the same mortgage
when you purchase your next property. Basically, under
certain conditions, the lender will authorize you to change
home mortgages without any penalties and without having to
go through the entire mortgage process again.


7. Assumable mortgage
An assumable mortgage is a mortgage that you can transfer to
the buyer of your house. It is a very rare type of mortgage,
but a very powerful selling point for your buyer.
Furthermore, this type of mortgage comes without any
penalties if it is assumed.


8. Work with a financial expert
Before you choose your mortgage type, the lender or the
lending institution, get the insight of a professional. Ask
a mortgage specialist. A mortgage specialist will usually
answer your questions at no cost or obligation and, if you
do use his or her services, you will probably get your
mortgage faster and with better conditions than if you
didn't.


9. It's usually better to choose a good house instead of a good deal
Here is an example. In 2004, two houses were sold. One for
$320,000 and the other for $610,000. One was at a major road
and the other one, not far from it, in a reasonably quiet
street. Both houses were purchased by respective owners
around 1982. The one at a major road was paid around $70,000
while the other was paid around $90,000. The owner of the
later home not only got higher appreciation from his house,
he also enjoyed a quieter life for 22 years.

The 10 Biggest Mistakes When Refinancing

The 10 biggest mistakes when refinancing


1. The new interest rate does not justify the refinancing
Before you go ahead and refinance your mortgage, you have to make sure that the change will save enough to justify the whole process of refinancing. As a rule, if the interest rate does not decrease by at least .0075 (.75 %) to .01 (1%) then refinancing is probably not a good move.

2. Not knowing your real closing costs
Closing your mortgage is usually a charged service. By law (in the United States), closing costs must be disclosed within 3 working days of the loan application. Each lender has his own way of calculating the closing costs. Initially, your closing cost are an estimate. However, once your specific loan details are known, the closing costs are no more a mystery. Use the worst case scenario, if you still make a profit with that scenario, and if your new interest rate justifies it, you can consider refinancing.

3. Knowing why you are refinancing
A lot of people refinance just to reduce their interest rate. This is not always at your advantage. You have to make sure that you recoup all the costs that are involved in the refinancing operation. Some other reasons might force you to refinance. One of them might be debt consolidation, another one home improvements, or another large purchase. Some of these options may offer you some other financial advantages or personal advantages, like using some cash to purchase a car. In some cases you may be able to deduct some of the interest charges on your tax return. Any big decision like this one should always be preceded by a consultation with an expert (accountant or tax attorney).

4. Only listening to the APR advertising
The Annual Percentage Rate (APR) is not everything. Very often brokers will use the APR as a "teaser". This will get your attention, but the refinancing could cost your more than what's advertised. Such low rates are usually calculated by using a 30 year mortgage loan together with an accelerated bi-weekly mortgage plan. Very often, lenders will let you, AT NO EXTRA CHARGE, select an accelerated bi-weekly mortgage plan. Make sure you know all the facts before you start any refinancing.

5. Not knowing the mortgage broker's plan details
It's simple, you want to do your refinancing in the shortest amount of time and with as little hassle as possible. Ask your mortgage broker if he has performance guarantees and service plans. If he does, make sure your mortgage broker offers the quality of service you need.

6. Not knowing the broker's products
If you don't ask, you won't get. If all the mortgage brokers were equally created, you wouldn't have to, but it's not the case. You have to know what your broker has to offer you, what loan products are available, the terms and the rates. Sometimes, just what looks like a subtle difference, could save you (or cost you) thousands of dollars.

7. Failure to examine your credit problems
The majority of people have no idea what type of credit they have or how to repair any unfavorable credit which may exist. They fail to realize that credit is one of the key factors in refinancing a current mortgage. Credit problems not only bring down to a crawl the process of getting a loan, but can damage your ability to make numerous other purchases.

8. Not knowing how much money a lender is willing to loan you
If you are planning on refinancing your home, you must be aware that most lenders have strict guidelines on how much money they are willing to lend. The lender's decision is usually based on your loan-to-value ratio. In other words, mortgage lenders have limits on how much money you can borrow based on the value of your house.

9. Failure to find a reputable and experienced mortgage lender
You must associate yourself with a honest, high quality, and service-oriented mortgage lender. This is probably the most important ingredient in finding good home refinancing. Dealing with the right lender can mean the difference between having your loan refinancing approved or rejected.

10. Lying to your mortgage lender
There is nothing like the truth. If you already owe too much, refinancing might not be the best move. Be ready to give all the information the mortgage broker requests (income tax information, credit card balances, other loans, current mortgages, etc.)

10 House Buyer Traps and How to Avoid Them

10 House buyer traps and how to avoid them

1. Trusting tax assessments
   
   Some people think that tax assessments are a way of
   evaluating a home. The difficulty here is that assessments
   are based on a number of criteria that may not be related to
   property values, so they may not necessarily reflect the
   home's true value.
   
   
2. Bidding without knowing
   
   What price should you offer when you bid on a house? Is the
   seller's asking price too high? Are in front of a real deal?
   Before making one the biggest purchases of a lifetime, you
   should take a very close look at the real estate market in
   the area you're a thinking of purchasing. Without the
   knowledge of the real market value of the houses you intend
   to visit, and ultimately purchase, your are more than likely
   to make a blind bid.
   
   
3. Getting the wrong house
   
   Simple questions, like what do you want in a house, can have
   pretty complex answers. A lot of buyers get all excited at
   the prospect of finally owning their house. So excited and
   emotional, that sometimes they end up being the owner of a
   house that does not answer their needs. The house may be too
   big, or too small, or it's too far from work, or what looked
   like just a few small renovations is much more then
   expected. Take time now, before the buying process, and
   define what you really want in your house. Write it down.
   
   
4. Unclear house title
   
   As soon as you start negotiating your new home, make sure
   that it is free and clear by having a title search done. One
   of the last things you want to learn later in the process is
   that there are taxes, leases or other liens on the property
   you are about to own.
   
   
5. Incorrect survey
   
   When you make your offer to purchase, you have to make sure
   you request an up to date property survey that defines very
   clearly the boundaries of the property. You never know what
   type of changes may have occurred since the last survey
   (i.e. swimming pool, extension to the house, fence, etc.)
   
   
6. Surprise fix-ups
   
   You just can't expect every seller to sell their home in
   perfect condition. Remember the old saying: Buyer beware!
   You have to ensure that a complete inspection of the house
   is done before you sign anything. Or if you do sign, make
   sure it is conditional to your entire satisfaction after a
   house inspection. An independent inspector will check the
   house inside and out and give you a report outlining the
   items that needs to be fixed with the associated costs.
   
   
7. No pre-approval
   
   You're not pre-approved! What are you waiting for! It's
   fast, it's free, and it's easy. Once you have a pre-approved
   mortgage, your house shopping is much easier. You will feel
   free and secure because you will know that the money you
   need to purchase your deam house will be there when you need
   it.
   
   
8. Seller neglect
   
   If the home seller fails to do some repairs or to comply to
   any part of the purchase contract you will feel very
   frustrated. One way to avoid this is to agree, in the
   purchase contract, to put a fixed amount of money in an
   escrow fund that will cover the items the seller was
   supposed to attend to.
   
   
9. Hidden charges
   
   Before you make your offer, make sure you made a list of all
   the costs associated with the purchase. The typical
   "forgotten" cost is usually a forgotten loan disbursement
   charge of some sort of underwriting fee. One way to avoid
   any hidden charges is to have the lender give you the total
   charges in writing.
   
   
10. Close too fast
    
    This is a critical part of the whole buying process. Take
    your time, read all the paperwork a day or two before you
    sign. Have a lawyer go through it and make absolutely sure
    that all the paperwork reflects the transaction your are
    about to do. Double check everyt hing, it's the best way to
    avoid a forgotten clause or to notice, too late, that
    something has been added or subtracted. If there is a
    problem, you will have a hours to solve it before the
    closing day.