Dawn Tittsworth's (pennsylvanrealtoryorkcounty) Blog

Real Esate News

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Thu, 10 Dec 2009 04:04:48 -0800

York County Pennsylvania here ! Great artical ! We've been watching a buyer's market for so long, we've almost forgotten how to see the signs of the building of a seller's market. Keep in mind, a seller's market slowly builds (over months) while a buyer's market can hit overnight. While the National Association of Realtors announced sales of resale homes jumped more than 10 percent nationally in October 2009 over a year earlier - those numbers are not the numbers to watch while you're trying to find the bottom of your local market. Don't make a local decision based on national information. The resale numbers have been up in markets all across the country for more than a year, we just never heard about it from the evening news, et. al., because your national news venues don't watch local markets. You should. Most buyers and the media in general look to pricing to dictate that the bottom of the market has been hit. But before making that dictum, a buyer must first define what the bottom really is. Many would say, it's when prices hit the lowest they've been. True. That's part of the signs to watch. And if price is you're only interest, then go ahead and wait for the bottom in pricing. Keep in mind, however, that everyone else is also looking for that number. When prices start to move up, they are moving up because the demand is starting to outpace supply and higher priced homes are starting to sell again, thus you may have missed the optimal time to purchase a house at a low price with someone else's money to help you with closing costs. When the prices hit bottom (and the only way you can figure that out is the first month that prices start moving up, you've already missed the bottom), consumers are already starting to beat each other out for a shrinking inventory. So, here are the indicators to watch to find the bottom: 1. Inventory: Watch for inventory to start dropping. When this happens, you've entered the bottom territory. Buyers start jumping on the bandwagon once there is so much inventory that prices have hit an acceptable low level. 2. Seller Subsidy: When sellers are giving back maximum amounts allowed by loan programs, you've hit the bottom. Some loan programs allow up to 6 percent of the sales price to be given back to the buyer at the settlement table from the seller for closing costs. Imagine, purchasing a house for $300,000 and getting $18,000 back from the seller for the buyer's closing costs - that's a sign of the bottom. (And this is most likely after getting 3 or 4 percent off the sales price - another $9,000 to $12,000). 3. Pricing: Now this is where everyone watches, when in reality it's the sign that the market has been climbing up from the bottom for several months. If you're going to track pricing as a bottom indicator, then start watching it from month to month, instead of year over year. Thus, when prices start moving up, say, from March to April to May to June - THEN you may have hit the bottom on pricing. A market can experience price increases month after month while still showing lower prices than a year before - thus the buyer, while waiting for signs that prices are moving up over last year, may have missed the bottom on pricing. By the time value starts surpassing year over year, the climb up has already begun. 4. Multiple offers: As buyers start competing for the best properties that have hit the lowest price, then you've found another sign of the bottom of the market. 5. Days on market: Once prices have hit bottom and buyers start gobbling up houses and start competing with each other - then you'll see the days on market begin dropping. For some markets across the country, all of these indicators have already started showing signs of the bottom, such as Florida, Washington DC, Phoenix, Las Vegas, Las Angeles, and other metropolitan areas that were hit heavy by foreclosures. Watching your local numbers is the only way to determine if you've hit the bottom of the market for your local real estate market.

It's the least we can do..... Special Rules for Members of the Military, the Foreign Service

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Thu, 03 Dec 2009 23:33:32 -0800

Congress has acknowledged the unique circumstances affecting members of the military, the foreign service and the intelligence community by making the following exceptions that apply to both the $8,000 tax credit for first-time home buyers and the $6,500 tax credit for repeat home buyers. Exemption From Tax Credit Recapture Rules Typically, homes that are sold or that cease to be used as a principal residence within three years of the initial purchase are subject to recapture of the tax credit. However, qualified service members who sell or move from a tax credit home within three years of the initial purchase due to official extended duty are exempt from the recapture rule. Extension of Tax Credit Deadlines The home buyer tax credit is available for qualified purchases with a binding sales contract in place on or before April 30, 2010 and closed by June 30, 2010. However, for qualified service members who are ordered on a period of official extended duty, these dates are extended for one year. For these home buyers, the tax credit applies to sales with a binding sales contract in place on or before April 30, 2011 and closed by June 30, 2011.

Fannie and Freddie Fail To Meet Low Income Lending Goals

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Mon, 30 Nov 2009 05:01:03 -0800

York County Pennsylvania home sales here ! Fannie and Freddie Fail To Meet Low Income Lending Goals We have heard how evil lenders have been writing loans to families that could not pay it back and causing the housing crisis. But if you look at the facts Fannie and Freddie encouraged this behavior. By admitting they have failed to hit their quota they are telling us that even they think the mandates that Congress gave them are crazy. Both companies missed their 2008 goal to set aside 56 percent of their loan purchases and mortgage guarantees for low-and moderate-income borrowers, Federal Housing Finance Agency Director James Lockhart said today at a real estate industry event in Washington. He didn't say what the new target would be.One of the ways Fannie and Freddie made their goals in previous years was to buy those subprime mortgages in private- label securities and that wasn't a safe and sound practice, Lockhart told the Asian Real Estate Association of America and National Association of Hispanic Real Estate Professionals. Fannie and Freddie are saying they were buying up subprime loans to hit their quota of low income loans. We all know subprime loans have been a big cause of the foreclosure crisis. Now we have the look at our national lenders who have to fulfill mandates from the federal government that they can not. These mandates they are just as dangerous as they were 5 years ago. How can Congress and the Federal Government have not changed the mission of Fannie Mae and Freddie Mac to work in todays environment?

New Home Sales Down Even With First Time Homebuyers Credit

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Mon, 30 Nov 2009 04:34:37 -0800

New Home Sales Down ! First Time Homebuyers Tax Credit Not Helping Much ..... New Home sales dropped in September as buyers decided this may not be the time to purchase a new home. Single family homes sales were down nationwide by 3.6 percent. What is interesting is that the National Association of Home Builders used the downturn as a call for Washington to increase the $8,000 new home buyers subsidy. Now I understand why, that is $8,000 more per home the government will give the builders towards the price of a home, or if we want to be technical, $8,000 that the home price does not need it to be lowered for the house to be priced right. The inventory of new homes on the market continued downward for a Twenty Ninth consecutive month, to 251,000 units in September. This is the lowest inventory since November 1982. However, the slower pace of sales kept the months' supply unchanged, at 7.5. On a regional basis, new-home sales were down 10 percent in the South, which is the nation's largest housing market, and were down 10.6 percent in the West. The sales rate did not change in the Northeast in September, but gained 34 percent in the Midwest due to last-minute deals sparked by the tax credit. Everyone keeps talking about a bottom forming, but how can that truly be if both interest rates and property values are both being stimulated by tax dollars. A bottom is when the market, not the government, decides it is. If the government does not have the confidence in the market that it has to throw money to keep the market from tanking, we do not have a bottom. And until we have a true bottom, we are not going to have market that most people will feel comfortable buying into.

CMA's for Leads

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Mon, 30 Nov 2009 04:18:48 -0800

Dawn Tittsworth York Pennsylvania here ! What an insightful artical! Thanks ! How do you handle CMA requests for leads? or...people that visit your web site and ask for a valuation on their property? Most of the leads I get are buyer leads, but they do have the ability to request a CMA at the same time. This is what I have found to be the best course of action. I call them if they left their number. I check the MLS to see if the home is currently listed, some area. If it is listed I send an email and tell them that I see their home is currently listed, I ask if it is ready to expire or if they are just looking for a second opinion. Most of the time, they are just looking for a second opinion and I don't hear back. If they really want to find out what their home is worth, I will ask them if I could do a quick 10 minute walk through of their home to give them an exact price range. This is the most effective. Occasionally they would rather I just send them information on the neighborhood. Which I am glad to do. I send the following things. My pre-lisiting questionairre. Marketing plan Both Actives and Solds in their neighborhood I put it in CMA format and I do not make ANY adjustments. You can not adjust for home you have not been in, but you can get a rough idea based on neighborhood sales. When I attach the CMA to the email I make sure I tell them again, this is just the current activity in their neighborhood and that to get a exact price point, I would need to walk through the home or condo. Most of the time they are appreciative of all the information and we schedule a time to get together. Sometimes they are just trying to get a rough idea before they start to look at homes. The point is doing a CMA is a skill and takes time. I am happy to help folks out, but I am not an automatic evaluation service. That is why I check the MLS before going one step further. Many times online leads don't realize that it is a real life person that does the market analysis. They think it is just a computer doing it. Typically I spend 2-3 hours on a market analysis. I've been told that is tooooooo long of time, but getting that sweet spot to list a home at is so important. Starting off with the right sales price is critical to getting the home sold. Do I ever list a home that is "slightly" over priced. Yes I do but this means no more than 10%, with a guaranteed price reduction in 30 days. This happened to me last night and I realized I had not blogged on it. Hope it helps .

To sum it up for now " the new tax credit status"

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Thu, 29 Oct 2009 15:21:18 -0700

Senate leaders have agreed on an extension of the $8,000 first-time homebuyer tax credit along with a new $6,500 tax credit for move-up buyers, but it is unclear when the chamber will vote on the measure. The credit extension would run from Dec. 31, 2009 through April 30, 2010 and give buyers with a binding contract an extra 60 days to close. The tax credit extension raises the income limits to $125,000 for single-filers and $225,000 for joint filers. This applies to first-time and repeat buyers. To qualify for the $6,500 tax credit, repeat buyers must have used a previous home as a principal residence for five of the previous eight years. The Obama administration said it supports an extension of the first-time homebuyer tax credit. "In extending the tax credit, we urge Congress to include strict measures to combat tax fraud and protect responsible homeowners," Treasury secretary Timothy Geithner said. The tax credit extension is expected to be attached to a bill extending unemployment benefits by 20 weeks. Still, it is unclear when the Senate will pass the extension bill (H.R. 3548), despite broad bi-partisan support. The current $8,000 first-time homebuyer tax credit is set to expire Nov. 30.

Dawn in York PA here! The update on the tax credit once again.......

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Thu, 29 Oct 2009 15:17:14 -0700

Senate Votes To Extend Homebuyer Tax Credit WASHINGTON (AP) ¯ Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6 percent in September, and some industry representatives blamed uncertainty about the tax credit.Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.Senators in both political parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.Popular bills like the one to extend unemployment benefits often attract amendments that would have a difficult time passing on their own.Republicans were demanding that they be given a chance to offer amendments to restrict federal aid to the beleaguered community activist group ACORN and on requiring that people receiving unemployment insurance be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of new hires.Majority Democrats have refused to add the amendments.If the Senate passes the bill, it would go to the House, which passed a similar bill extending unemployment benefits last month. House leaders have also said they support extending the tax credit for homebuyers.Sen. Chris Dodd, D-Conn., has been negotiating for several weeks with Sen. Johnny Isakson, R-Ga., to craft an extended tax credit for homebuyers that would pass the Senate.Lawmakers didn't release a cost estimate for extending the tax credit, though similar proposals were projected to cost about $10 billion.Industry representatives said uncertainty about the tax credit is hurting new home sales. September's decline was the first since March.It takes 45 days to 60 days to close on a house, making it unlikely a sale made today would be consummated by the end of November, said Lucien Salvant, spokesman for the National Association of Realtors."Buyers right now have an incentive to hold off, not knowing whether the credit will be extended," Salvant said.About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.The tax credit for money-losing businesses is a favorite among Republican lawmakers. Businesses could get tax refunds by using losses from 2008 and 2009 to offset taxable profits made in the previous five years. Under current law, they can only offset profits from the previous two years.The provision would help a variety of industries, including retailers, manufacturers and home builders, though it's expensive."It's clearly a way to put cash in the hands of some major economic players," said Clint Stretch, a tax policy expert at Deloitte Tax.A similar proposal that was ultimately dropped from the economic stimulus package enacted in February would have cost nearly $20 billion over 10 years. Lawmakers are working to reduce the price tag.Because people are so strapped for cash, this is a good way to get refunds when businesses need them for operating expenses, said Rachelle Bernstein, vice president and tax counsel for the National Retail Federation.

FHA allowing use of $8,000 for .......

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Sat, 30 May 2009 03:28:48 -0700

York County Pennsylvania here! FHA did indeed release a directive late yesterday (not the best day to be releasing important info!) detailing the procedure for using the $8,000 tax credit for closing costs and/OR extra downpayment. The tax credit funds are "purchased" by the lender and shown as a 2nd lien on the home and a payment must be shown and used to qualify the borrower. If the payment on the tax credit loan is deferred out 36 months, the payment will not be counted. And--there may be fees associated with this lien. So, if you have someone who is getting enough seller help to only need their minimum 3.5% downpayment, this really is no help at closing. (remember, each $1,000 in downpayment only saves $5.37 per month, so most 1st time buyers would rather have $8,000 in the bank than $45 lower payment) If there is no seller help, this could be a huge assistance as it may eliminate the need for gift funds or saving for closing costs. As with any new rule like this, there will undoubtedly be further discussion and possible changes as issues emerge. (Inevitably, someone will try to "circumvent the system" in some way on this, so clarifications will probably occur) The funds cannot be used for the first 3.5% downpayment. So this should work much like a "refund loan" that many firms offer on tax refunds. Since this was just released yesterday, I'm sure it will be a few days before we know how this will be implemented as this directive seems to leave it open to each institution as to how they will provide the funds.

IMPORTANT LENDING INFORMATION JUST IN 5/29/09

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Fri, 29 May 2009 03:40:37 -0700

York Pennsylvania here! Lot's on the docket today, so read on! Good news #1- After the carnage of Wednesday, as of right now, we have reclaimed half of that days loss of 207 "basis points" (34 bps yesterday and 94 as of right now today!) This is very encouraging as it may show that the move on Wednesday was indeed a "panic selloff" and we will move back to those levels. I have heard many analyst and pretty smart people commenting that the FED will have to make some announcement as to their intentions for the MBS program and that they may even announce even more money being targeted for MBS's to calm the markets. The last thing this economy needs is to shut off the recovery in housing just when it's taking hold. So for now, I would advise people to "hang out" and see which direction we go, if we get back close to where we were, lock in and be happy. #2-- FHA has announced that they will allow buyers to immediately use the $8,000 for "costs" in buying a home. NOT DOWNPAYMENT! This just goes to show why we should not get involved in "speculation" about possible new programs. As with the initial comment that sparked all sorts of "we know what is coming" proclamations from many, details have not been announced and NO ONE has this program yet. Once the final details are released and we know how this will work, I'll pass that on. Important fact--While we are recovering from Wednesday's drop, that is EXACTLY what we have in store WHEN, NOT IF, the government stops holding rates down. Moves like Wednesday's were not supposed to happen while the Gov is doing what they are---but it did! This tell us that the market can move at any time, regardless of "outside" pressure. The problem is that all this action is creating the very real threat of future inflation, or 'hyper-inflation", that is very bad for mortgage rates in the long term. So, as we go forward, while our rates should remain very low, be aware that the day is out there when all this stops. Then, we very likely will move into the mid 6% range and maybe even 7% range within days. So--get on the phone and let all your fence sitters know what happened Wednesday and let them know that is peanuts compared to what may happen when the Gov steps out of the MBS market. The way it looks right now, that should be sometime early next year--BUT- that does not mean the market will not force their hand earlier--WEDNESDAY IS A CLEAR..

HUD committed to RESPA changes

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Wed, 13 May 2009 00:43:59 -0700

York County Pennsylvania Real Estate here! This is something we all need to know. HUD committed to RESPA changes Housing Secretary Shaun Donovan says he remains committed to implementing new standardized loan-disclosure forms and settlement procedures proposed last year by the Bush administration, although HUD is stepping back from a proposal to ban certain incentives offered by homebuilders. Meanwhile, the prospects of legislation that would force HUD to delay by one year implementation of changes to the Real Estate Settlement Procedures Act (RESPA) -- currently scheduled to take effect Jan. 1 -- remain uncertain, despite a lopsided House vote last week. Donovan said Monday the Department of Housing and Urban Development remains committed to implementing the changes to RESPA, restating previous claims by HUD that they will save consumers an average of $700 per loan by helping them shop for the best deal. "This administration is committed to providing consumers with clear and transparent information when they make the biggest purchase of their lives," Donovan said in a press release. "We will implement the new RESPA rules as part of broader reforms to the mortgage process." The RESPA rule changes include incentives for loan originators to package settlement services like title insurance with loans, with transparent pricing that's intended to encourage comparison shopping. Consumer advocates say homebuyers often pay too much for such services because they don't shop around. During a transition period this year, lenders can begin using the new standardized forms and take advantage of incentives for packaging settlement services with loans, but are not required to do so until the end of the year. Industry critics accuse HUD of overestimating the benefits of the RESPA rule changes for consumers, and underestimating the drawbacks and costs, such as accelerated industry consolidation. The National Association of Mortgage Brokers and the National Association of Home Builders (NAHB) last year filed separate lawsuits to block implementation of aspects of the RESPA rule changes (see story). Mortgage brokers object to HUD's plan to require that yield-spread premiums -- rebates paid by lenders when borrowers take out loans with higher interest rates than they might otherwise qualify for -- be credited against their closing costs on a new standardized Good Faith Estimate, or GFE. Homebuilders were opposed to changes to RESPA's "required use" provision, which would have barred them from offering consumers incentives that required them to use homebuilders' affiliated mortgage and title insurance companies. That aspect of the RESPA rule changes was originally set to take effect Jan. 16, but HUD pushed back implementation after it was sued by NAHB, and said it was considering withdrawing the change (see story). Donovan said after reviewing more than 1,200 public comments that HUD will propose a new "required use" definition "to help consumers shop effectively and safely for homes and mortgages, free from the influence of disingenuous discounts and incentives that steer consumers to the use of affiliated businesses." In the meantime, HUD's existing "required use" definition will remain in effect, allowing homebuilders to continue offering incentives that are tied to the use of their affiliated businesses. But some real estate industry groups remain hopeful that Congress will scuttle the RESPA rule changes altogether. The House has approved a bill that's primarily targeted at curbing abusive and predatory lending with an amendment that would also delay implementation of RESPA rule changes for one year. HR 1728, the Mortgage Reform and Anti-Predatory Lending Act of 2009, is intended to take away incentives for mortgage brokers to put borrowers in risky loans, and require lenders to retain some exposure to risk, rather than passing it all on to secondary-market investors.

mortgage pre-approval

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Fri, 08 May 2009 01:30:21 -0700

York County Pennsylvania here! All comsumers need to know this! !!!! One lender is all you need, and you may or may not end up working with that lender. A mortgage pre-approval is the same as an approval in the sense that both involve a check of your finances and your credit. Pre-approval is something less than approval, however, because the property value is preliminary and won't be definitively established until you have a purchase contract. Furthermore, a pre-approval may not specify a mortgage price, and if it does specify a price, it is not binding on the lender. So what exactly is it? It is a statement of opinion by a lender that a prospective buyer has the income, assets and credit to carry the mortgage required to purchase a house of some assumed value. Since the borrower's mortgage-carrying capacity depends on an interest rate that is not yet known, and since the price of the house is preliminary, a pre-approval has a lot of slack. It is adequate, however, for the purpose for which it is intended. That purpose is to convince a home-seller that a prospective buyer has the means to make the purchase and should therefore be taken seriously. The only reason for you to obtain a pre-approval is because the owner of the house you want to purchase is looking for you to have one. More than one would serve no purpose. Why do lenders offer them? Their hope is that the purchaser will view the pre-approval as the first step in obtaining a loan. It is a way of generating a promising lead. But you should not view it that way. Selecting a lender for no other reason than that the lender had issued you a pre-approval, would be a mistake. On the other hand, there is no reason to exclude that lender from your search for a loan provider. If your experience with the pre-approval was favorable, and if you are having difficulty making a decision among loan providers, you might want to give the lender providing the pre-approval an edge over the others seeking your loan.

How Lease-to-own purchase works for the consumer

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Fri, 08 May 2009 01:21:17 -0700

York County Pennsylvania here! I have had several clients wanting to explore Lease-to-Own Purchases lately. I look forward to this helping comsumers. What Is a Lease-to-Own Purchase? A lease-to-own house purchase (also "rent-to-own purchase" or "lease purchase") is a lease combined with an option to purchase the property within a specified period, usually 3 years or less, at an agreed-upon price. The borrower pays an option fee, 1% to 5% of the price, which is credited to the purchase price. The borrower pays rent, and an additional rent premium that is also credited to the purchase price. If the purchase option is not exercised, the buyer loses both the option fee and the rent premium. As with any kind of financial contract, lease-purchase deals can be structured in such a way that all the benefits flow to one of the parties and none to the other. Buyers especially need to be careful. But lease-purchase plans have a solid economic rationale, which means that they can be structured so that both parties benefit. Contract Features of a Lease-Purchase A lease-purchase has 6 major provisions. The sale price of the house and the rent are market-determined, yet subject to negotiation just as in a straight purchase or rental transaction. Buyers often know less about the market than sellers, which places buyers at a disadvantage unless they do some homework, which is advisable. Buyers generally prefer a long option period because it provides more time to build equity and repair credit. A long period can boomerang on them, however, if they are never able to exercise the option, since they lose the rent premium they have been paying all the while, in addition to the option fee. Sellers generally prefer a short option period, but if it is too short, the house won't be sold. The option fee and rent premium are viewed differently by buyers and sellers. To the buyer, they are part of the equity in the house they will soon own. Fully anticipating that they will exercise the option, the only cost is the interest they would otherwise have earned. To sellers, however, these payments are the best guarantee that their houses will sell; if they don't sell, the payments are retained as income. That the benefit to the seller generally exceeds the cost to the buyer makes the lease-to-own deal a possible win-win. A lease purchase also may give the renter/buyer the right to assign the option to buy. This will usually have considerable value to the buyer, because it means that the option can be sold in the event that it has value but the buyer is not able to exercise it. It is a cost to the seller for the same reason. Using a Lease-Purchase to Buy A possible alternative to a lease/purchase deal for consumers with poor credit and/or no cash is a sub-prime loan. The high-cost sub-prime market, which actively solicited clients and victimized many, was pretty much gone by 2008 but sub-prime loans continue to be available at reasonable prices from community groups or state and local finance agencies. Borrowers have to search out these sources, but if they can qualify for a loan from one, it is probably a better route than a lease/purchase. The lease-purchase offers homeownership opportunities to consumers who can't qualify for a loan from any source, but who are prepared to bet on themselves. The bet is that before the option period expires, they will qualify for the mortgage they need to exercise the purchase option. During the option period, they have the opportunity to rebuild their credit and accumulate equity while living in the house. Consumers who need to rebuild their credit rating during the option period should understand that paying their rent on time won't do it. Rent payment information is not used in compiling credit scores. While Fair Isaac, the company that developed credit scoring, has recently unveiled an "expansion" score based on "non-traditional credit data," it does not yet include rent payment information from individual home owners. Lease-purchase buyers who need a higher credit score must focus on their credit cards and loans. Even though it is costly, the right not to exercise the option is of value to buyers. If there is something seriously wrong with the house, neighborhood, or neighbors, the money left behind on a lease-purchase is much smaller than the cost of an outright purchase followed by a quick sale.

Free Annual Credit Report for Buyers,Sellers and Consumers

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Wed, 22 Apr 2009 01:19:33 -0700

This service is something I always offer up to my buyers and sellers. It keeps them in the loop. Recently I had a potential buyer who makes upwards of 80,000 a year but had not been paying their bills on time due to just plain old forgetfulness. Anyway, now this is the first tool I send to potential buyers. AnnualCreditReport.com is the official site to help consumers to obtain their free credit report. Fight identity theft by monitoring and reviewing your credit report. You may request your free credit report on line, request your report by phone or request your report through the mail.Free credit reports requested on line are viewable immediately upon authentication of identity. Free credit reports requested by phone or mail will be processed within 15 days of receiving your request. This central site allows you to request a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and Trans Union. Please be aware of how you arrived at this site. To ensure that you are visiting the legitimate site, type https://www.annualcreditreport.com directly into the address bar on your browser. You will never receive an email directly from the Annual Credit Report Request Service.

Short Sales

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Wed, 22 Apr 2009 01:07:26 -0700

The Deal Killer of Short Sales Over the past year we have seen and read more about short sales than we probably ever wanted to know. For most pros out there it's a market niche that they have avoided because of the difficulty and uncertainty generally associated with short sales. And I think we would all agree that the process is, if anything, daunting. But there is one thing that is often overlooked that could increase your success rate. Many times in the rush to get the lender onboard the documentation process becomes the primary focus. Everything is zeroing in on getting the price and the primary lender's cooperation and in the process a critical item sometimes get's put off or forgotten about. The average loss on a short sale is around 19% of the loan amount versus 40% for homes sold after foreclosure. It's a great negotiating tool to use with the lender but you need to make sure you are negotiating with the one that makes the decision. Generally speaking to the lender's loss mitigation department can handle the negotiation even if the loan was packaged into a mortgage backed security. But the bigger issue is not with the primary lender. Too often the failure to identify and factor in junior lien holders until later on in the process causes the deal to fall through. In the case of junior mortgages a rule of thumb suggests that if there is 20% left over after dealing with the first you are most likely in the ball park. But remember, nothing is cast in concrete until all parties have signed off ... and that is what usually causes the problem. You are fighting a time crunch from the "get go" and the more complex the financial issues are the harder it is going to be to hold all the parties together. The answer may be a simple step that gets overlooked in the heat of battle. A simple title search up front before sitting down with the seller can save a lot of surprises. Yes, they told you about the first and the HELOC but they forgot about the tax lien or the 3rd that Aunt Cindy holds. The short sale is tough enough in a perfect world and the last thing you want is a buyer and seller in agreement on a price that doesn't have a chance of flying. And while you're at it, don't forget the sale is sure to be in "as is" condition and your buyers need to be very confident that they know exactly what it's going to cost them to get the property in condition to meet their requirements. Be certain that they are getting the professional advice they need to make that decision and are not relying on something you said in passing - which needs to be "left unsaid." And don't forget to use those costs when negotiating with the lender on the final price. Put all this together and you have a whole lot going on with all 3 parties ... the last thing you need is for the "rabbit" to jump out of the hat at the last moment with a sign that says "what about me." The short sale can be a good deal for all parties but there are very few of them that close easily. Do your homework and make sure that both the buyer and seller are fully aware of all the terms and conditions and are prepared for the eventual delays that are sure to come from the lender(s). Get Aunt Cindy or the tax man out of hat up front and keep them from killing the deal. If their presence makes the deal impossible you want to find that out as early as possible to avoid wasting everyone's time. Moving into the short sale market niche can be very rewarding but it's a process that involves a lot of twists and turns along the way. If you want to learn more about short sales you should check out the Certified Short-Sale Professional (CSP) course from RealtyU. The CSP online course as well as all of RealtyU's other designation courses are being offered.

"NEW" 2009 First Time Home Buyers Credit

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Mon, 09 Mar 2009 01:34:51 -0700

Hello from Dawn Tittsworth in York Pennsylvania! A Sweet Deal for First-Time Homebuyers The ins-and-outs of the $8,000 First-Time Homebuyer Tax Credit If you are - like many Americans - trying to figure out the best time to make your first home purchase, then you may want to take a closer look at the first-time homebuyer tax credit included in the American Recovery and Reinvestment Act, which was signed into action by President Barack Obama on February 17, 2009. Repayment The 2009 homebuyer credit DOES NOT require repayment. Repayment of the credit is only required if the owner sells the property within three years of purchase. Credit Amount While the credit is equivalent to 10 percent of the purchase price of the home, the 2009 credit increases the limit of the credit from $7,500 to $8,000. OTHER IMPORTANT NOTES REGARDING THE CREDIT 1. Qualifying for the homebuyer credit The credit is for first-time homebuyers only. As it relates to this credit, a first-time homebuyer is defined as any taxpayer who has not owned a principal (or main) residence for a period of three years prior to the home purchase. The first-time purchase must be of a principal residence. 2. Income limitations The legislation does limit availability of the first-time homebuyer credit based on modified adjusted gross income (MAGI). Single filers with MAGI of $75,000 or less and married couples with MAGI of $150,000 or less are eligible for the full $8,000 credit. Those individuals or couples with MAGI above these limits may be available for a reduced credit on a phase-out basis. 3. Purchase window The 2009 first-time homebuyer tax credit is retroactive to January 1, 2009 and covers purchases through November 30th, 2009. 4. Refundable credit The tax credit reduces your final tax liability and you will be refunded whatever portion, if any, of the credit that remains after applying the credit to taxes you owe for that year. For example, let's say you qualify for the full $8,000 homebuyer credit and your total tax liability (after withholding) is $2,000. Your tax liability will be zero, and you will receive a refund for the remaining $6,000. 5. Claiming the credit Claiming the credit is actually very simple. To take advantage of the first-time homebuyer credit, you'll need to complete IRS Form 5405 which will help determine the tax credit amount. You'll then claim that amount on line 69 of your 1040 tax return form. No pre-approval forms or applications are required! As with most issues related to a home purchase, be sure to consult with your REALTOR® for additional information or to ensure that you and your prospective purchase qualifies for this homebuyer tax credit.

Real Estate related web sites keeping us in the loop!!

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Sat, 31 Jan 2009 02:00:22 -0800

Hello All !!! Real Estate related web sites keeping us in the loop!! School Matters (reports on schools around the country) Department of Justice Competition and Real Estate REALTOR.com Inman News Great Schools Info Broker Agent News RIS Media REAL Trends Zillow.com Trulia.com rebac.org Build Your Route (Compliments of MapQuest) Real Move Value (includes fliers with home moving tips to remember to send your closed buyers

Credit Inquiries and Your Credit Score

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Tue, 27 Jan 2009 04:49:20 -0800

Hello All

Credit Inquiries and Your Credit Score

Do you know if FICO and the three major credit reporting bureaus have changed the rules for credit card shoppers? It's frustrating when you shop for better interest rates and get them only to have them punish you on your credit score for shopping. Any info would be appreciated. Punish may be a somewhat harsh word. A credit inquiry typically lowers your score by five points or less. In addition, credit inquiries stay on your credit report for 24 months, but are only calculated into your score for 12 months. Fair Isaac Corp. (FICO) does take into account that comparison shopping is a smart thing for consumers to do when obtaining credit for a car loan, mortgage or a credit card with better terms. As a result, credit inquiries are not included in your credit score for the first 30 days from the date of inquiry. So, as long as you secure the credit for which you are shopping within 30 days, none of the inquiries will affect your credit score for that particular loan. Once the 30 days has expired, the FICO scoring model includes all inquiries for the same type loan within that 30-day period as one inquiry, not multiple inquiries. For example, if you decide to go shopping for a new car and visit four different dealerships and you allow all of the dealerships to pull your credit report, your score will only be reduced by five points not 20. Besides, the inquiries are not included after 12 months. Will you really need more new credit or another new car within a year? Some lenders may check your score using the three major credit bureaus scoring model -- the VantageScore that was launched in March of 2006. You have less time to shop with VantageScore than you do with FICO. VantageScore will consider all inquiries for the same credit within a 14-day period as one inquiry. Just as with FICO, VantageScore will not lower your score much for the inquiry. Credit inquiries are included in the new credit portion of the scoring model for both FICO and VantageScore. Each scoring model weights new credit as 10 percent of your total score. Credit inquiries are just one item considered in the new credit category. Recently opened credit accounts are also included when calculating this portion of your score.

Credit Scoring and interest rates!!!

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Mon, 26 Jan 2009 02:23:25 -0800

Hello All, My lender just sent me this! "What's your rate?" If I had a dollar for every time I've been asked that question, I'd retire! While that is never the right question to ask when searching for an appropriate mortgage package, in this market it is an open invitation for your clients to be "taken to the cleaners" by those "not so honest" lenders that are still "out there" in big numbers!! Everywhere you turn you are hearing the drumbeat of "4.5% mortgage rates" or even lower. While it's true that 4.5% money is available, what most of the ad's and "proclamations" don't divulge is how many points one must pay to actually acquire that low rate! If you have been in the business for any length of time, you were used to getting rate quotes for 0 points. This was pretty much the standard for most people, as they did not want to pay points to get a better rate. Well those days are over for at least the near future! Here's why: In order to get 0 points, a lender must receive enough money in "premium pricing" to allow them to provide the loan for no cost, other than the normal fees. When this happens, you get a 0pt loan. Now for an "end lender" to give back enough for this to happen, they needed to hold the loan for a good period of time assure they would reclaim what they paid the originating lender upfront. With rates not fluctuating wildly, there was a pretty good bet they'd get their money back. Now, put those same "end lenders" in the current environment and they see the possibility of wild swings in rates with no predictability and they are saying "we're not paying anyone money to originate a loan that might be refinanced in a few months!" So you have a situation where the lenders are just not providing money with 0pts for anything near the level of rates we would see in a "normal" market. So if you want 0pts you have to pay around .625% or more in rate, higher than a 1pt loan, which will make the 0pt loan unattractive and reduce the risk to the "end lender". (End lender being the bank that will "service" the loan. Now, let's throw in another, BIG factor---CREDIT SCORE! Once upon a time, if you had 640 credit you would get the same rate as someone with 780. That all changed in the Fall of 2007. Now we have RISKED BASED PRICING, which means the lower your score the more your costs. Take for instance a borrower with a middle score of 650, with 10% down. IF this borrower can get an approval for a Conventional loan, they will pay as much as 3.25 pts "risk premium" to acquire any rate they may choose. Even borrowers with scores as high as 740 can be penalized by some lenders, depending upon the downpayment! In one of the odd "twist" in this pricing structure, there are times where putting more money down will result in a higher "risk premium" being charged. This is due to the reduced level of mortgage insurance that is required. Loans with less than 10% down have a higher level of mortgage insurance and are thus viewed as less risky by the end lender. A borrower with 20% down and a lower credit score can pay more than a borrower with the same score and 5% down, all due to the absence of mortgage insurance. While there are times that you may see exceptions to these "new rules", the vast majority of conventional loans now available in this country will follow along these lines. FHA loans do not have as many "risk based" tiers as Conventional, but many end lenders have recently begun to increase those that do apply. Add to these factors the issue of "lock term" and you have even more potential cost. For the past several years, 30 day closings became the norm. Now, with increased scrutiny of all documentation and appraisals, and the increasing prevalence of foreclosures and short sales, it can take longer to get to closing. The costs of 45 or 60 day locks can add an additional .25pt to .75pts, depending upon the lender. So, to accurately quote a rate to your clients, a Mortgage "Professional" will ask many questions BEFORE quoting a rate to a client. Please make your clients aware that the following information is required to assess a client's level of risk for the purpose of pricing: 1. Credit score--unless I know the "middle score" of the 3 repositories used, I cannot know for sure what to quote. I can take their word for it, but I don't know for sure until I see it myself. 2. Loan Amount- Lower loan amounts, and sometimes higher than $300,000 will trigger small adjustments to the price as well. 3. Lock Term--How long is needed? If you have a foreclosure or short sale, you better allow 60 days. 4. LTV- How much is being used for downpayment? As indicated above, this can make a big difference. 5. Type of property- Some lenders are now charging as much as .75pts extra for condo's---more risk. 6. How many units? More than 2 will cost an extra 1.00 pt. So, as you can see--"What's your rate" should be replaced by "I'd like to see what options you can provide for someone with my qualifications!" This market is very complex and full of challenges, with more coming everyday. The current interest rate environment is one of the best in 50 years, but it is, at the same time, the most complicated. Educating your clients about the "nuances" of the marketplace can make all the difference in how smooth the whole process goes--and how many referrals they can generate!

7,500 tax credit for 1st time home buyers

Dawn Tittsworth, Realtor - Buyers York County (ReMax Patriots 717-676-0189) — Sun, 25 Jan 2009 10:39:17 -0800

Hello all, Lets talk about the $7,500 tax credit for 1st time home buyers from the government To sum it up: The home you purchase must be at least $75,000 Home must be purchased between April 9, 2008 and July 1, 2009 Income requirment : Single person can not make more than $75,000 per year Couples can not make more than $150,000 per year You will have to pay the government back within 15 years or when you sell the home The credit is interest-free Of couse there are several in's and out's but this is it in a nut shell!!