Tom Kotzian, the team leader at Keller Williams Lakeside (my office), has arranged for a representative from Bank of America to come to our office and teach a workshop about Equator.   This workshop is free, and space is limited.  ALL agents regardless of company affiliation are invited to attend.   I urge you to RSVP soon if you would like to attend.   Please see information below for details:

Tom Kotzian has scheduled the short sale seminar many real estate professionals have requested with Bank of America. Bank of America is now handling all of Countrywide's REO properties.  This is a very beneficial program to your current business practice. 

This workshop is a must for anyone doing business with Bank of America or former Countrywide foreclosed properties.

WHEN:        Monday, May 10, 2010

WHERE:      KW Lakeside (45609 Village Blvd, Shelby Twp.)
 
TIME:          9:00 am - 12:00 Noon

WHAT:        Scott Parker, Chief Liaison
                  Short Sale Department
                  Bank of America - New "Equator Program for Short Sales"



Please call Tom Kotzian at 586-532-0500 to reserve your seat, or email Tom at Tom@KWLakeside.com

Last week I received an email from someone who wanted to know if there is a list of HUD approved condos that she could look over.  I directed her to HUDS site that is updated when condo sites are approved, searchable by state, city or zip code.

This morning I had some free time to read and decided to more thoroughly delve in to the FAQs that are posted by HUD regarding all the new guidelines that must be met in order for a buyer to purchase a condo with a FHA mortgage.

I have to tell you, while scrolling through one of the FAQs I was outraged to read the following (question #25 in the above linked FAQ):

A HUD owned REO does not need project approval.

How's this for a scenario?:    2 condos are for sale in Mystic Village (made up name).  One of them is owned by HUD, the other is owned by Mr. Jones.   

The HUD owned property can accept an offer by a FHA buyer and smoothly sail to closing. 

Mr. Jones cannot sell his condo to an FHA buyer unless his complex receives approval.

Excuse my language for a moment please...but how in the hell can this type of double standard be
allowed to happen???

A few days I wrote an article about the National Association of Realtors® taking a stance and adding to
their Standards of Practice the verbage "don't give out the lockbox code!".   While reading and commenting
it reminded me of something that is taking place with HUD owned homes:   The locks are re-keyed with
the same HUD key being able to open any HUD home in my area. 

This past December I had another buyer client purchase a HUD home.   Thankfully, she was a cash buyer
so closing happened relatively quickly (Start to finish 30 days).  One of my (and her) biggest concerns during
the process was the security of the home post offer to the time it was legally hers.

Here are a couple of things that you can do to protect yourselves prior to closing on your HUD owned
home  and changing the locks:

If you do all of the above you will be much more successful in getting HUD (and it's designated agent in your area) to repair or replace anything should anything come up missing or vandalized prior to your closing on the home.

"Do not give out my lockbox code to anyone!!"

I've been seeing this remark (and variations of it) on many listings in our MLS over the last 6 months or so.  As always, it makes me cringe when I realize that the listing agent has had to deal with other agents who do not treat a sellers property with care and respect.

Finally the National Association of Realtor® addressed this issue in the updated Standards of Practice - Article 3 - 9, effective January 1, 2010:

REALTORS shall not provide access to listed property on terms other than those established by the owner or the listing broker.

What a shame that this even had to included in our Standards of Practice, but I'm thrilled that it is there now.  Perhaps more real estate agents and brokers will start to file formal complaints and hold the agents who participate in this lazy & unethical practice accountable.

I knew it wouldn't last forever, but I was kind of shocked to get the information in my email that the HUD incentives for Michigan are ending soon.

As of February 12th of this year (yes, less than 2 weeks away) HUD is putting an end to the wonderful incentives that they've been offering for the since the fall of 2008 in Michigan.

The $100 down FHA program will be gone, as well as the $2500 buyers "gift" on home purchases over $25,000.

Please please PLEASE if you are considering putting a bid on a HUD home and want these incentives your bid has to be accepted by February 12th.  Any bids  accepted after that date will not be able to use these incentives.

Agents and mortgage brokers:  If you have clients who are starting the process to purchase a HUD home and are counting on the $2500 or the $100 FHA down payment you will want to pass this information along to them quickly.

To read the announcement from HUD please visit Mcbreo.

I wrote a blog post earlier about appraisals, and what we as buyers agents can do to help our buyer clients to understand current market value and to avoid appraisal issues.

One of the comments I recieved said something like "You may not make the sellers happy..." 

I'm a nice person.  I like to think that I'm an easy agent to co-op with, and that I do perform my duties with care and diligence.  My brokers have never received a complaint about me, nor do I ever expect them to. However, being nice and co-operating with the sellers agents doesn't mean that I won't do my job to the best of my ability for my client - the buyers.

My fiduciary responsibility as a buyers agent is to my buyers.  When they find a home they wish to purchase my responsibility kicks in to high gear.  I will analyze the current market for them and present them with all of the facts that I have on hand.  They will then be able to make an educated decision about the price to offer for the home. I will then take their offer to purchase, along with my data and present it to the sellers. 

Not long ago I heard these words from a sellers agent after my buyers offer was presented to them: "My seller is a nice man.  He's worked hard, and his home is in good shape.  He really deserves a better offer and isn't happy with this one."

My reply?  "I'm a nice lady.  I work hard.  My home is in nice shape.  I deserve good things to happen to me. But my home is still only work XXX and it wouldn't appraise for more than XXX, and I surely wouldn't expect a  buyer to pay more than XXX."

               My buyer didn't overpay for that home, and we moved on to find them another home.

Listing agents need to keep their sellers in the loop.  Sellers need to know current market values.  They need to understand the danger of overpricing their home, and have realistic expectations of a sales price.  All sellers  deserve this information from their agents on a regular basis - not just the nice sellers :-)

When you plan on purchasing a home using mortgage money it doesn't matter what type of mortgage you are applying for (FHA, VA, Conventional) - your mortgage lender is going to order an appraisal of the homes value.   They will want to make sure that the amount of money you are asking to borrow is not more than the home is worth in todays market.

Below are a couple of things that I do as a buyers agent to help make sure that my buyer clients are not wasting their time and money on a home prior to writing the offer:

Investigate the last 90 days of sold homes within a 1 mile radius, in the same school district and of similar construction & features.  (Do not consider sales data greater than 90 days unless you have fewer than 3 comparable sold homes in that initial look back period.)

Include the distressed sales in the search of sold homes.  (They are the norm now, unfortunately, and you can bet that the appraisors are going to use this data in their reports.)

Deduct sellers concessions that were paid by the seller of the sold homes to the buyers from the "sold" prices.  This deduction will reflect the market value of the home that sold more accurately.

Ask your agent to prepare an analysis using this type of data to present to the seller and their agent when your offer is presented.   It is much easier for the seller to understand how you came to the price of your offer when they have hard raw data in front of them.  It then becomes more of a business decision to them, and less of a personal affront if your offer is much lower than their asking price.

If your offer is a sound one, based upon recent data and your own personal view of the homes value, and it is not accepted by the seller don't be shy about walking away and finding another home.   A buyers agent who is working for you would much rather have you walk away then to spend emotional energy and financial resources to continue the process of purchasing a home without much of a chance of it passing the lenders appraisal guidelines.

Just as we suspected would happen, FHA has now had some major changes and it is now going to cost you more out-of-pocket money to purchase a home.

            New - Sellers concessions are limited to 3% of the purchase price.

            New - Upfront mortgage insurance premium is increased to 2.25%.


Here is an example of what the lower sellers concessions to the buyers will look like for you:

If you are purchasing a $50,000 home the seller will only be able to  contribute $1500 to help you with closing costs, pre-paid items and/or tax prorations.   (This same purchase before the new FHA guidelines  would have meant $3000 in help to you.)

Many of you are thinking of using your income tax refunds to help you purchase your first homes this year.  Often you think that it will be more than enough money with some extra for furnishings, repairs, etc.  That may not be the case anymore.  You may need every last dime of that  refund for your FHA down payment (3.5% of the purchase price) PLUS money for closing costs and pre-paid items.

When you receive your income tax refund tuck it away in your savings account. Have a conversation with your mortgage lender about how much you will need to bring to the closing table for that new home purchase.  Save every penny that you can - you're going to need it.

Here in my Macomb County MI area we have been in the throes of the foreclosure / unemployment / plummeting home values for several years.  

During all of this chaos I've spoken with many people who have tried to have their mortgages modified with
the Making Home Affordable program.   They've all shared the same scenarios & frustration:   Repeatedly
faxing and / or sending requested documents, phone calls to follow up weekly and in some cases daily,
mortgages being sold to another lender while in the midst of the process & having to start all over again.

Most of the people that I know of who have tried to have their mortgages permanently modified are now in
their 9th month to one year of "send it again, we didn't get it" mess.   Only a couple of them have been put
into the "trial program" of making the new modified payments for a 90 day trial period before they are
supposed to receive the permanent modification paperwork.  (I know of 2 people who are in the trial program, completed the 90 days of payments, and still haven't received permanent modification.)

Yesterday though I received a phone call from someone who said:"It's here!  The permanent modification  document!"   (This was after almost one year of haggling, begging and the loan being sold to another lender and starting all over again.)

Of course I asked what they thought was the key to getting the final documents.  The answer?  Getting angry. Refusing to take "no" during one lengthy phone call and consistently going up the chain of command to the new mortgage holder.  Doing this finally put them in touch with the Fannie Mae Foreclosure Prevention Specialist who actually provided this person with their own contact information for follow up calls and email. 

Today I am going to call or email the other people that I have spoken to about their frustration with this process to hopefully give them a bit of momentum to keep going forward and to see the light at the end of the tunnel. 

One small step, but an important one, and one that I hope we will hear much more about in the coming months as  these "trial periods" progress.