Tim's Blog

Buyer Loan Programs and Grants

Tim Montoya (Long & Foster Real Estate, Inc) — Thu, 10 Jul 2008 13:13:25 -0500

I thought I would post this link for all of you. This site allows you or your buyers to enter there information, select a county in which they desire to buy, and gives them a list of grants or programs they may qualify for. It is obviously going off of the information provided, so the final determination would be made by the lender, but this is a great way to see if there are funds or loans available to either get someone into a home or to allow someone to increase their purchasing power.

http://www.mdhomeprograms.com/program/index.php

Alternative Financing?

Tim Montoya (Long & Foster Real Estate, Inc) — Tue, 01 Jul 2008 12:47:36 -0500

Everyone knows how tough it's gotten to get a 1st time home buyer into a home. The current lending environment has made it almost impossible for someone on a moderate income to purchase a home in a safe and moderately priced neighborhood. The challenges in this current market are not unlike those we experienced a few years ago. When the market was bustling, buyer's agents were trying to make their clients look like the seller's best choice. Now is no different. That is why we all need to be educated on the variety of programs and types of loans available to our clients. It's not enoughto just put your client in front of a lender, we need to know a little about how the lender works. By this i mean, we need to be on top of the changing trends and changing mortgage programs. Currently, lots of agents are using the non-profit organizations(ie..Genesis and Nehemiah) who receive money from the seller and pass it back to the buyer to cover closing expenses. This has been a great tool for the time being, but I really think the days of this type of circumventing the system are numbered. Besides, what will happen when the market stiffens up a bit and sellers are not reducing prices and not contributing to buyers' expenses? Maryland has many programs available to offset the expense of purchasing a home. There are several grant programs where buyers receive cash for closing costs or down payments, CDA (Community Development Administration) & D-SELP(Down payment & Settlement Expense Loan Program). There are loan programs that offer below market rates for buyer within a certain income bracket, CDA. There are also businesses that will contribute to their employees closing costs and the state will match it up to certain amounts, HK4E ( House Keys 4 Employees) .

You might think that these programs are only for those with low incomes, but the limits on most of these programs are very generous. Te programs above are not the complete answer for a buyer who has demonstrated poor decision making, but they could mean the difference for someone just needing some help to get over the "hump". There are required classes for some of the different programs and they typically need to be completed prior to entering into a contract of sale, but one or two evenings is well worth it to someone who is only a few thousand dollars away from either buying a home or renewing a lease!

Appraisals? Who are they good for?

Tim Montoya (Long & Foster Real Estate, Inc) — Tue, 10 Jun 2008 12:34:38 -0500

This post is part frustration and part inquiry into others' experience. It seems to me that lately appraisers and their reports are getting crazy. Most appraisers are scared beyond belief to put a value on a property that is higher than the purchase price. Is it me, but it now seems that the banks are intimidating the appraisers? I've seen banks refuse the appraisals of the their own appraisers! How ironic is that? The bank is usually the entity that orders the appraiser, even though the buyer pays for it, and now they're not trusting their own contractors! When will this insanity end? It's bad enough that as Realtors we are counselling our sellers to be conservative in pricing their homes, now we have banks that are undercutting the even more conservative appraisers. Then, on top of all of the outside influences, I'm encountering appraisers who are not even consulting the listing agent as to how the list price was determined. It's one thing to not want to have an agent push a high price, but it is another thing to not ask the lsiting agent what this particular property has, that might demand a higher price than other surrounding properties. This trend of under appraiseing properties will just continue the current market condition and not bring relief to anyone. If appraisers would give an accurate value for a home irregardless to the likelyhood of them receiving furture orders from any specific financial institute, then maybe values wouldn't be all over the board.

Another Low Offer!

Tim Montoya (Long & Foster Real Estate, Inc) — Fri, 06 Jun 2008 13:06:50 -0500

It sure is getting hot these days. Summer weather is officially here. The temperature is rising daily as is seller's blood pressure. The current market sees many homes still available, but homes are selling. What gives? Well, from my experience, the homes that are selling are the properly priced homes, whether newly listed or reduced prices. The homes that were over-priced to give the seller negotiating room are sitting. These sellers are not seeing the traffic that the newly listed and competitively priced home are seeing. What's the lesson here? Listen to your realtor and price your home to be competitive with the surrounding listings. An over-priced home will not draw the attention that a competitively priced home does and will become stagnant after a few weeks. Additionally, there are more points to negotiate over than just price. Ask your Realtor what you may have that could be used or become a point of negotiations. A colleague recently had a property under contract and the buyers requested a handful of repairs well after the deadline specified in the home inspection addenda. Not wanting to lose the deal for sticking to the agreed contract, the sellers offered to leave a swingset that was currently in the rear yard. The buyers were excited when they heard this and decided to drop the requested repairs. The swingset may have had a value of $300, while the repairs would have costed $500-$700 and would have taken time and effort to have them done. Oh, by the way, the sellers never intended to take the swingset anyway! While price is a main point of interest for buyers, there are several other areas where a compromise can be made. Don't just think because someone makes an offer that is lower than your asking price that the offer is horrible. Take the time to weigh all of your options and maybe even ask the buyer's agent what the buyer's other needs are. Maybe there is something that is of value to the buyer that you wouldn't mind negotiating on.