Real Estate According to Carol Anne

2011-12-20T13:41:00.000-08:00

I’m not supposed to say “Merry Christmas” anymore because it isn’t PC. I started to climb up on my high horse, but then realized, “Well, yeah. If we assume that to say “Merry Christmas!” means that I’m attempting to force the majority of humans into a Christian mold then they’re right and we should give it a rest.”

But what if we just accept the spirit of the thing, instead of thinking so much all of the time? But maybe that’s just easy for me to say, not really being a member of any organizational religion. I called up some of my non-Christian friends and asked them if they feel insulted or coerced or bad when somebody smiles and waves and wishes them a Merry Christmas (or Easter, or Valentine’s Day…………) Neither the Buddhist nor the Taoist nor the Jew nor the atheist nor the agnostic feel insulted at the words “Merry Christmas!” They accept the motivation and ignore the details. It’s sort of like if I was Swedish I could still enjoy the fireworks on the fourth of July, right?

Do you detect some week before Xmas punchiness? Yes, you do. I’m tired of the stress, I’m tired of the buying, I’m tired of planning, I’m tired of thinking about the money I’m spending, I’m tired of Carols and cards and thrice-accursed commercials. (I had already cursed Christmas commercials thrice by the end of October. No telling what the count is by now.) I’m tired of thinking about it and I’ll be glad when the day is over.

I’ve forgotten what Christmas is all about.

But wait a minute! When I was a kid I started counting on December 26th. “365 days until Christmas.” Seriously – I always knew exactly how many days it was until next Christmas. So what the heck? I’d better figure it out before the ghosts come and take me on some strange trips.

(I know exactly what happened, actually. I blame Christmas for things that aren’t its fault. Christmas didn’t create horrible memories – horrible people did. Chance did. Bad luck did. Crap happens and there’s a 1 in 12 chance that it will happen during The Season. If I insist on associating that song or that smell with this happening pretty soon I’ve ruined the whole thing. So then I overcompensate by buying too much stuff, trying to make up for the fact that I’d rather be in Belize.)

But what about the good memories? I’ve been on this planet for 52 Christmases. There’s gotta be something to get twinkly about, right? There’s gotta be a grin or two back there someplace! There are. I’ve just gotta pull my head out of my attitude and see it. There are lots more grins and giggles than there are icks. LOTS more. OK. Like what?

I love the idea of celebrating the birthday of one of the world’s great teachers, and I really love “Peace on Earth, Good Will Towards All.” I love the children’s Winter programs. They do crack me up, those poor little kids up there on the stage. I love the tree. I love the lights. I love to give sparkly presents. (I hate to wrap them, but they’re sure pretty when they’re done.) I love the feast, and I especially love that I now have help cooking it. I love people’s attitudes this time of year - we really are nicer, I think. I love seeing the “Feed The Hungry” bins overflowing. I love the excitement on the grandchildren’s faces when they come over and see a new present under the tree. I love Ralphie.

I believe that the great leaders of all religions taught the same thing: Be nice. Be good. Do your best. Keep your priorities straight. Love another. Take care of the weak and feed the hungry. Do the right thing. We are all brothers and sisters, and what hurts one of us hurts all of us. Respect the Earth. At its best, Christmas embodies these concepts and gives us a season for embracing them.

So there’s the secret. I have to quit concentrating on the things that are nails on a blackboard to me, and make room to see and appreciate the things that are special to this time of year.

Happy Holidays!

2011-09-13T12:35:00.000-07:00

‎"Promise me you'll always remember: You're braver than you believe, and stronger than you seem, and smarter than you think." (Christopher Robin to Winnie the Pooh) A.A. Milne

bizarre

2011-09-02T08:35:00.000-07:00

It’s weird being human. Life itself is odd, and then we increase the lunacy by choosing a profession with a structure that is inherently bizarre.

We work a job where we often don’t get paid for our time and expertise. I think that every professional in the world should work on a commission basis, just like us. Lawyer? You don’t get paid if we don’t win. President? Not a penny until everybody has something nutritious to eat. Doctor? I’ll write a check when I’m healthy. Airline? Pound sand until I’m on the ground, on time, holding unbroken luggage. Think of the difference THAT would make in the world!

If we do manage to get paid, we get paid the same amount no matter if the deal goes along slicker than a greased pig or if it takes months of blood, sweat, tears, and sleepless nights. Sometimes I make $1,000 an hour, sometimes it’s more like 10 cents an hour.

We work a job where we have no idea when we get up in the morning what’s going to happen that day. A day with a clear calendar at 8 AM might see me writing 6 different offers, we might see 6 deals go south, or I might get a nap. There’s just no predicting.

If we work with a buyer, we usually expect to get paid by the opposing side, which is weird. To explain to a buyer how it could happen that they might get to write us a check (for taking good care of their best interests and probably getting them an awesome deal) is viewed as some sort of nasty betrayal. Truly bizarre!

And then, on top of being human and a REALTOR®, we decide to practice in Arizona - the Wild West and land of Article 26. Article 26 allows a licensee to write contracts. I seem to remember being told (back in the Dark Ages at pre-licensing school) that Arizona is the only state that does allow it. Can you imagine trying to work a deal where you had to wait for an attorney to write the offer and addendums and BINSR? I don’t even want to think about it – I needed a simple letter from an attorney 2 weeks ago and finally got my hands on it last Thursday. Being totally at their mercy would make me crazier.

Sometimes I think that being a REALTOR® is like herding cats (The buyer cat, the buyer cat’s agent cat, the seller cat, me usually as the seller’s agent cat, the lender cat, the underwriter cat, sometimes the asset manager cat, the title examiner cat, the home inspector cat, and the title officer cat who is also trying to herd everybody.) through a maze of thousands of carefully arranged dominos. I want the dominos all to fall precisely at the right time, but these damn cats keep getting their own ideas and it’s illegal and probably bad business to hit them.

Or, being a REALTOR® is like riding a roller coaster. Our income depends on the above dominos falling in an orderly and controlled fashion. This requires that so many other people do their job competently, but how and when they do that job is out of my control. If just one of those people drop the ball or discover a defect in the property or the title report I go from scooting along happily looking forward to a nap straight into crisis mode, in about point-2 seconds. (And yes, I do wave my hands in the air and scream, just like on a roller coaster. It’s great therapy, and the grandchildren find it to be eminently amusing. Try it sometime.)

What about when one of those cats is totally incompetent? Or to be kind, they’re perfectly competent in their own stomping grounds but today they aren’t there? What if that incompetent cat is the agent on the other side of the deal? AND what if in the midst of doing your job and selling the property you agreed to pay him half of the commission if he would bring you a buyer?

I got an offer from just such a guy.

He didn’t include the On-Site Wastewater treatment or the well addendum, both of which were necessary. When I included them with the Counter offer he got confused and twitterpated and defensive.

He did, however, include office-generated addendums that I had never seen, insisting that I disclose an alphabet soup made up of stuff that I have never heard of. When I countered with, “Sorry. We don’t need these stinkin’ addendums” (or something along those lines) he informed me with tears in his eyes that he wouldn’t get paid if they weren’t filled out to his Broker’s satisfaction. This paperwork is necessary and required in Brokerage Far Away. He counseled his buyer to refuse to sign my counter if we wouldn’t do his very important disclosures, which did not have an “I dunno.” option.

I talked to his Broker and beat him with my credentials and finally convinced him that we’re not hiding anything, we just honestly don’t know what those things are and I’m not going to allow my Seller to fill out a disclosure when I don’t know what it’s talking about. He relented and that’s all fine, but we wasted 12 days in the process and my Seller doesn’t have 12 days to waste.

In the normal world out there, we get to pick who we work with. Not REALTORS®. If an agent brings me an offer or my buyer falls with in love with a listing, I work with whatever agent I get. AND they get half of the money, whether they do a good job or whether they just keep running around lighting unnecessary fires that I have to put out. Strange.

For fans of the totally bizarre, what about the short sale that’s in escrow, ready to close, docs are being signed at title as we speak and the bank finalizes the foreclosure, literally 1 hour before the short sale would have recorded? AND then puts it back on the market for $30,000 less than they would have gotten from my buyers 6 weeks ago? Sheesh. Bizarre. And stupid, and makes me pull out and dust off my conspiracy theories in trying to make sense of it.

REALTORS® are a strange breed, to be able to deal with this sort of uncertainty. I think back on all of the agents that I’ve known in the past 24 years. I guess that 1 out of 100 are still active. Especially lately, it’s bizarre and it’s hard, this business of ours. In spite of all that we’re making it work.

I told an agent today that 3 things are required to make it in real estate in a tough market. Success requires talent, luck, and hard work. I think that the agents without all 3 of these have washed out, and today we’re left with the cream of the crop. That’s awesome!

So give your favorite REALTOR® a pat on the back. We’re smart, we’re tough, we’re flexible, we’re brave, and we’re proud of what we do! We are the few, the strong, the REALTORS®!

Revolution

2011-08-03T08:58:00.000-07:00

On the surface of the world right now there is war and violence and things seem dark. But calmly and quietly, at the same time, something else is happening underground. An inner revolution is taking place.

Certain individuals are being called to a higher light. It is a silent revolution. From the inside out. From the ground up. This is a Global operation... A spiritual conspiracy.

There are sleeper cells in every nation on the planet. You won't see us on the T.V. You won't read about us in the newspaper. You won't hear about us on the radio. We don't seek any glory. We don't wear any uniform.

We come in all shapes and sizes, colors and styles. Most of us work anonymously. We are quietly working behind the scenes in every country and culture of the world. Cities big and small, mountains and valleys, in farms and villages, tribes and remote islands.

You could pass by one of us on the street and not even notice. We go undercover. We remain behind the scenes. It is of no concern to us who takes the final credit, we care only that the work gets done.

Occasionally we spot each other in the street. We give a quiet nod and continue on our way. During the day many of us pretend we have normal jobs. But behind the false storefront at night is where the real work takes a place.

Some call us the 'Conscious Army'. We are slowly creating a new world with the power of our minds and hearts. We follow with passion and joy.

Our orders are from the Central Spiritual Intelligence. We are dropping soft, secret love bombs when no one is looking. Poems - Hugs - Music - Photography - Movies - Kind words - Smiles -Meditation and prayer - Dance - Social activism - Websites - Blogs -Random acts of kindness.

We each express ourselves in our own unique ways with our own unique gifts and talents. 'Be the change you want to see in the world.' That is the motto that fills our hearts. We know it is the only way real transformation takes place.

We know that quietly and humbly we have the power of all the oceans combined. Our work is slow and meticulous, like the formation of mountains - it is not even visible at first glance. And yet with it entire tectonic plates shall be moved in the centuries to come.

Love is the new religion of the 21st century. You don't have to be a highly educated person or have any exceptional knowledge to understand it. It comes from the intelligence of the heart, embedded in the timeless evolutionary pulse of all human beings. Be the change you want to see in the world. Nobody else can do it for you. We are now recruiting. Perhaps you will join us, or already have....All are welcome... The door is open.

AUTHOR UNKNOWN

It's hot out there.

2011-07-06T09:55:00.000-07:00

It’s official. It’s hot out there. We high desert dwellers look forward to the evening when it cools off, and plan our days around avoiding the hottest hours. During the summer I get up at 5 AM and then observe the Mexican tradition of siesta. This is a good plan, unless some non-siesta-er makes the phone ring.

We who live here know about the heat and how to stay safe when it’s an oven outside, but what about our clients and guests?

I got a call this morning from some people wanting to go walk property. “Can we meet you at noon on the Hillside Drive parcels so that you can point out the corners?”

“Yeahhhh……No. Temperatures are getting to over 100 degrees by 10 AM, so I’m sorry, but until September I will only walk properties before 8 AM or after 7:00 PM. I will point at the corners from the road, but if you want to walk it will have to be either early or late.”

They had never thought about the heat. They don’t come from here, so what was second nature to me is something that never occurred to them.

What about the foreclosures and other vacant houses? Many of them are buttoned up tight with no cooling going, so walking into them is like opening your oven door when the biscuits are done.

We want to make a living, so we do end up showing property to people who don’t have a history with heat and dehydration. They don’t get that these human bodies of ours can start to shut down after just a few minutes in intense heat.

Since some of us don’t really understand, we need to watch out for each other. How do we do that?

We start by being aware, and by being smart.

The warning signs of possible trouble are: nausea, vomiting, fatigue, weakness, headache, muscle cramps, and dizziness. Signs of BIG TROUBLE are: skin hot to the touch, flushing and redness, absence of sweating, rapid pulse, difficulty breathing, strange behavior, hallucinations, confusion, agitation, disorientation, seizure, and coma. (Well, great. Three quarters of the signs of heat stroke and heat exhaustion are behaviors that I see my clients exhibit every day when they’re considering buying or selling real estate. I guess we’ll have to rely on absence of sweating, right?)

If you see any of these signs in yourself or others, this is not the time to dither around making a judgment call. Dial 911 immediately. My son the paramedic explained to me something that I did not know. There is often no charge for an ambulance call. If you are taken care of by one of the municipalities’ or the County ambulances, the charge is paid by your tax dollars at work. (No, I’m not sure about Sedona.) It’s only if you get one of the private companies that the patient is responsible for paying. No matter - if there’s a possibility of a problem, get help and don’t haggle about which ambulance shows up. These things can go from “maybe I should be worried” to life-threatening very quickly, and for somebody to die or be damaged over an ambulance charge is ludicrous.

So how do we avoid this nice day in Arizona suddenly turning into one of the worst days of your life?

Always have a cooler in your vehicle filled with ice packs and lots of water. (I met a REALTOR® in Ehrenberg who handed out frozen washcloths – that was Heaven.) If somebody is in trouble you will need to cool them down while you wait for the medics. Get them into the A/C or shade immediately, and then slap some ice packs on the groin and armpits. (Snort. Every guy that read this just flinched. Maybe I should say “Gently place some ice packs………?”) Get their shirt wet and have somebody fan them. DO NOT dump a cooler of ice water over their heads – that could put them into shock. The key is tepid to cool water, not freezing cold water.

Dehydration is also big trouble, just as big as heat problems. The two often go hand in hand because if we don’t drink enough water then we don’t sweat and then we get too hot. ALWAYS bring plenty of water and make people drink it – they might not know to do so. (There’s that cooler again.) If you’re drinking beer or coffee or tea or some of the energy monster drinks, know that these do not qualify as liquids. Alcohol and caffeine are diuretics, which eliminate moisture from the body – these drinks add to the problem rather than alleviate it.

Since I’ve lived in this country all of my life, I have gotten overheated and I have been dehydrated. I knew when I was too hot because I felt, well, too hot. The mistake that I made was in thinking that if I ignored it it would go away. No, I should have dealt with it the second I realized, but I was stubborn (Mike had told me that it was stupid to take that hike.) and pretty soon I was in trouble. If you want to read the story it’s at

http://realestateaccordingtocarolanne.blogspot.com/2009/08/yesterday-was-mikes-and-my-6-th.html

I don’t know if it’s true or if it’s an old wive’s tale that if you get heatstroke once you’re more susceptible to it in the future. I am certainly more aware and reactive, but I don’t know if I’m more susceptible.

A doctor once told me that if you’re feeling even slightly thirsty you’re already in the first stage of dehydration. The day that I got dehydrated, at first I didn’t really know what was going on. I was taking my Broker classes in Phoenix during the summer, operating on the thinnest of shoestrings. I forgot my water bottle and didn’t want to pay a buck for water out of the vending machines, so I just sat there in class thirsty and thirstier. I felt suddenly very crappy, and it just kept getting worse. Now that I know what being dehydrated feels like I slam lots of water immediately. I always improve amazingly quickly.

Please, my friends. Be aware, be the voice of reason, be the bearer of water, and be the dialer to 911 if necessary. Let’s take care of each other and let’s be careful out there.

2011-06-10T12:39:00.000-07:00

What are some housing hot-buttons that can get your home sold, stat? Did you know that it helps to have a Trader Joe’s market nearby? There’s so much information on the web these days about how to stage a home and create compelling curb appea, that you might think you know all you need to on the subject. Just when you thought you’d mastered the matter, we thought we’d brief you on 5 more things that can get your home sold, some or all of which might never have occurred to you.

1. Your neighbors. Most homeowners contemplating selling their homes understand the importance of well-kept neighboring homes. Many a buyer has pulled up to an amazing house, viewed it, and left shaking their head with woe because they just can’t cotton to buying the place on account of the shoulder-high weeds, car in the yard or crumbling ruins of the house next door.

On the flip side, your neighbors themselves - not just the homes, but the people - can actually help sell your home. Many homeowners know people who want to live in their neck of the woods; this is one reason many seasoned real estate professionals hold their listings open to neighbors and send out postcards to neighbors announcing the listing - the neighbors might know people who are interested in your home! Also, neighbors who are out and about chatting with each other, laughing and playing with their kids, mowing their lawns or painting their fences, or even who just offer a smile and helpful area knowledge to the buyer-to-be they pass on the street can make a very favorable impression on prospective buyers.

It’s a good idea, if and when you decide to list your home for sale, to touch base with neighbors you know and let them know; it’s in their best interests to get good new neighbors, so they might be able to go the extra mile in showing the neighborhood’s biggest asset - themselves - off to its best advantage.

2. The right sights, smells and sounds. It’s no news flash that the view of a used car lot; stinky foods or animal smells; and the siren song of a fire station next door could be deal-killers. What might surprise is some of the right sights, smells and sounds that can help seal the sale of your home. My experience has been - agents, chime in here! - that the more natural beautiful sights, smells and sounds are, the more favorably they’ll be received by the largest population of prospective buyers.

For example, playing a soundtrack of classical musical is fine, but will cause some skeptical buyers to wonder what noises you might be trying to cover up - especially if you’re in a condo or other potentially thin-walled property where neighbor noise might be an issue. On the other hand, birdsong can be attractive to some buyers. Artificial air fresheners? Not so much. The scent of the jasmine or lavender that grows in your yard? Even allergy victims can appreciate that.
You might be desensitized to the amazing views of trees, mountains or even water outside your window, but pulling back the curtains so prospective buyers can see for themselves is an absolute must.

Home buying is a multi-sensory experience - visual staging of the property itself is no longer just a plus, it’s a must. Homes which create pleasant impressions that fire on all of a buyer’s sensory cylinders definitely have the edge on their competition.

3. Your dog. The New York Times ran a piece a few months ago about sweet, well-behaved dogs (and cats!) who reportedly helped sell their owners’ Manhattan apartments. In a departure from the conventional wisdom that dogs should be removed and every trace of their presence erased from the home during showings, the article featured several buyers and brokers attesting to their belief that the presence of a particular cat or dog “help[ed] sell a property by making the place seem warmer or more appealing.” And I’m sure you’ve all heard me tell the story of the San Diego buyer who fell in love with a tract home listed at a price higher than all the nearly identical comparables he’d seen and wanted to make a full-price offer immediately - so long as the deal included the dog!

Definitely consult with your agent before you decide to implement leaving your dog at home for showings as part of your plan. I’m a dog lover, and would be concerned that someone might inadvertently let one of “my girls” out, if I left them there while my house was being shown; as well, would-be buyers or their agents may have allergies your pet could set off. Lately, it seems like I’ve seen many brokers attempting to capture the best of both worlds by making sure that the family pet or even the broker’s own pet is captured in a charming tableau in 1 or 2 of the listing pictures, even if they’re not present at the home during showings.

4. Your happiness. Video and even written love letters that extoll all the virtues for which you love your neighbors, your neighborhood and your property are contagious to buyers. I’ve seen sellers help buyers see their homes through their own loving eyes by posting videos on YouTube and including the link on the listing flyer or even by putting a binder containing a letter plus menus and flyers from their favorite neighborhood restaurants, dry cleaners and other local merchants out on the counter during showings.

Wide-open curtains that let light stream in, light and bright paint and decor colors and other home features that science has proven make residents more happy and functional also create this thought process in a buyer’s mind: “Hmm, these people seem happy here. I could be, too.”

Similarly, indicators that you invested a lot of love in your home by keeping it in immaculate order and pristine condition, by tending a well-cared for kitchen garden, lovingly furnishing and making comfortable (if not overly customizing) your kids’ rooms, all create the feel that a home was happily lived in - it’s like staging your home with a life well-lived, not just paint and tile.
5. The freeway or subway you thought was too close. There is such a thing as a freeway or elevated train tracks being too close to your home; if your place rattles or roars, for example, every time the train passes, chances any buyer will view that as a selling point are pretty slim. However, homebuyer attitudes toward being located near freeways and subways or bus lines are a-changing. Every upward click of gas prices renders buyers a tiny bit more interested in a location that is more commutable.

Where yesteryear’s buyers were all about the posh exclusivity of far-out suburbia, today’s buyers are more interested in financial and ecological efficiency and convenience. I’ve never heard so many homebuyers looking to own homes that will allow them to ditch their cars entirely as I have in recent years!

What might once have been seen as too close to the freeway has gotten a new spin lately, as a highly convenient, commuter-friendly location.

2011-06-06T08:35:00.000-07:00

Have you heard the one about a homeowner foreclosing on a bank?

It happened in Florida, involving a North Carolina based bank.

Instead of Bank of America foreclosing on some poor Florida homeowner, the homeowners had sheriff's deputies foreclose on the bank.

It started five months ago when Bank of America filed foreclosure papers on the home of a couple.

The couple said they paid cash for the house.

The case went to court and the homeowners were able to prove they didn't owe Bank of America anything on the house. In fact, it was proven that the couple had never had a mortgage bill to pay to anyone.

After the hearing, Bank of America was ordered by the court to pay the homeowners' legal fees.

How did it end with bank being foreclosed on? More than 5 months after the judge's ruling, the bank still hadn't paid the legal fees. The homeowner's attorney did exactly what the bank tried to do to the homeowners. He seized the bank's assets.

"They've ignored our calls, ignored our letters, legally this is the next step to get my clients compensated, " attorney Todd Allen told CBS.

Sheriff's deputies, movers, and the Nyergers' attorney went to the bank and foreclosed on it. The attorney gave instructions to to remove desks, computers, copiers, filing cabinets and any cash in the teller's drawers.

After about an hour of being locked out of the bank, the bank manager handed the attorney a check for the legal fees.

"As a foreclosure defense attorney this is sweet justice" says Allen.

Allen says this is something that he sees often in court, banks making errors because they didn't investigate the foreclosure, and it becomes a lengthy and expensive battle for the homeowner.

Things that REALTORS® wish that Sellers knew.

2011-05-14T08:04:00.000-07:00

THINGS THAT REALTORS® WISH THAT SELLERS WERE ARE AWARE OF, COMING OUT OF THE GATE.

#1: If you want to sell your property the only way to do it is to price it correctly. Curb appeal is important, interior pleasantness is important, extras are important, the right REALTOR® is important, but none of these things matter if the price is inappropriately high.

Unless your property is income producing in some way, the only way to price it correctly is by looking at the current actives and the recent pending and sold listings in your market. The actives are your competition – you have to put your price in line with the lowest of that competition. The pendings and solds are what an appraiser will look at when they determine property value for your buyer’s loan. Depending where these come in, even if we get a buyer to offer an unrealistically high price the appraiser may have to shoot it down.

I’m sorry, but it does not seem to matter whether or not those comps are short sales or foreclosures – I wish that it did. They are still the comps and we can’t ignore them. You might get a tiny bit of leeway for the fact that you’re not selling a distressed house, but not much.

We can no longer price a property by adding up what you owe plus what you want to walk away with. We also can no longer add up how much money you have invested in the property over the years and assume that THIS is what it’s worth, either. It’s sad, but I think that the days when we could set prices based on what you have in the property or what you want to get out of the property are long gone

(I have a Jeep. I’ve had this Jeep for years – it’s a good Jeep and I like it. Today, though, maybe it’s time to get a smaller Jeep, or a Jeep that’s closer to my children, or just a Jeep that’s cheaper or involves less maintenance and overhead.

I paid market value for my Jeep in 2006 – it cost me $25,000. Even with depreciation I figure it must be worth $20,000. The catch is that somebody who is in the market for a Jeep like mine can go and buy a brand new one for $17,500. So why would they give ME $20,000? Well, they won’t.

If I’ve listed my Jeep with a Jeep broker, maybe I’ll get mad and blame the Jeep broker when nobody wants to pay me what I want, even though he has told me that my Jeep Blue Books out at $12,000. (But that can’t be! My Jeep has some really trick stuff! It’s lifted, and Brain the Mechanic who built her installed a blue button that he says is nitro and I am NEVER EVER to push the blue button. My Jeep is so special!

I know what I’ll do - I’ll get a new Jeep broker that will tell me what I want to hear and I’ll list it with him and my Jeep still won’t sell some more. I’ll keep switching brokers and I’ll stay frustrated and my Jeep will lose value every year and sooner or later I’ll finally sell it for less than I would have gotten if I’d been realistic in the first place.)

Are you thinking that this behavior of mine makes no sense? You’re right – it doesn’t. No matter whether we’re talking about Jeeps or houses, it’s all about supply and demand. Right now supply is greater than demand. You have to be competitive with your price.

#2: The extras that you have to offer (like a pool or landscaping or top of the line appliances) will help us to sell your property more quickly, but extra features do not automatically equal extra money in your pocket. Enjoy your extras greatly - they are for you, not for resale value. (Remember my tricked-out Jeep and the blue button, above.)

#3: Listen to your REALTOR®. We know this market, we know the neighborhoods, we know marketing. We know what the buyers are looking for right now, so the things that are important to you might not be what we talk about when we describe your property.

“The REALTOR® in Far Away says that you should blah blah blah………..to get it sold.” The next time I hear that one I’m going to scream.

Your Aunt May in Vermont might have some good ideas (or she might not), or those ideas might be applicable in Vermont, or 30 years ago. Trulia or HomeSmart might have some good ideas, too, but those ideas might not work in this market or with your particular property.

PLEASE don’t insist that I buy print ads. PLEASE don’t try to require that I hold an open house. I might do both of those things, but I probably won’t because I have not observed that those things have much of a return anymore.

Keep in mind that I don’t get paid until your property sells, which gives me great motivation to market it competently and correctly. I will listen to your ideas – 2 or 3 heads are always better than one, after all. Understand that I may not agree to implement all of your ideas. I will have good reasons why I’m not and will be happy to explain them.

#4: Commission is not one of the negotiable items in a sale. If you want a discount then hire a discount broker and accept the discount service. I’ll be happy to talk to you if and when you’re ready to get serious about selling.

#5: You must disclose. If you know something that could conceivably affect the price that a buyer will be willing to pay you must disclose it. (There are exceptions for murder, suicide, sex offenders in the neighborhood and HIV/AIDS, but you MUST sing out about everything else.) If you don’t disclose the buyer could sue you when they find the problem and the neighbors or the plumber says, “Oh, yeah. That thing was always bad.”

#6: Smell is important. Buyers might not realize it, but they form an instant and immediate opinion of a property based on that first whiff as we open the door. It’s primal and it’s powerful.

You know about smoking inside, you know about pet odors, you know about cleanliness. BUT did you know that foofoo spray (or plug-ins, or incense, or candles) can be just as bad, and sometimes even more off-putting than a musty smell? If you use perfumes or chemicals, environmentally sensitive buyers might not be able to go into your house. Bleach, Pine-Sol, Fantastico, Febreze, Glade, …………. Seriously - please don’t. Vinegar and baking soda work wonders, they smell good, and they won’t make anybody sick.

#7: Stuff. Different REALTORS® have different opinions about how you can best present the interior of your house. Some of us say “Make it look like a model home! Make it sterile! I want no more than 2 motel pictures on each wall!” Others say, “It’s OK if it looks a little interesting – maybe people will stay a little longer and look a little harder.” We do all agree that too much stuff is detrimental.

Stuff that a buyer may find offensive is detrimental. (Nudes, Dia de Los Muertos art, paraphernalia, overtly religious imagery, Nazi or Confederate memorabilia, contraband, intimate machinery…… You get the point.)

We need some spaces that can seem like a blank canvas to a buyer. We need rooms that look as big as possible - too much stuff can make a room or a house seem small and claustrophobic. We need light and we need clean.

We need a buyer to be able to look at the property and imagine themselves living there.

#8: Please don’t leave valuables out in plain sight, especially pocketable valuables like jewelry and money and prescription drugs.

After a showing, please check your stuff and your locks and the garage door pull. Make sure that your home is still secure. Let your agent know if anything is awry.

#9: We need for you to leave while the house is being shown. The REALTOR® present knows these buyers and you don’t. We know what this person’s hot buttons are, and we know what to emphasize and what to downplay.

What happened one time was that the buyers were suspicious of the fact that a home was close to the river. They did not see this as an advantage at all – they had several small grandchildren, and they were very worried that the children might get away and get drowned. The seller showed up and started selling how close the river is, how unobstructed the access, what wonderful swimming holes, how he had made an easily traversable path to the deepest hole………. He went on and on and talked himself right out of a sale.

#10: After we put out the sign you may suddenly have scads of people driving by, and sooner or later one of these members of the public will knock on your door and ask to see the house. Gently hand them your agent’s business card and ask them to call and make an appointment. Please do not let unvetted strangers into your home.

I could continue all day, but it’s not necessary. Your REALTOR® is a professional. We’re highly trained, we know what we’re doing, we care, and we do a good job. Use your common sense when you hire your REALTOR® and then listen to us.

Abraham Lincoln quote

2011-05-02T16:49:00.000-07:00

"The problem with gathering your information from the internet is that there's no accountability. Take quotes, for instance; you can never be sure that the person who actually said it is who it's attributed to."

~Abraham Lincoln~

2011-04-18T12:28:00.001-07:00

To laugh is to risk appearing the fool

To weep is to risk appearing sentimental

To reach out for another is to risk involvement

To expose feelings is to risk exposing your true self

To play your ideas, your dreams before the crowd is to risk their loss

To love is to risk not being loved in return

To live is to risk dying

To hope is to risk despair

To try is to risk failure

But risk must be taken, because the greatest hazard in life is to risk nothing

The person who risks nothing, does nothing, has nothing, and is nothing

He may avoid suffering and sorrow, but he simply cannot learn, feel, change, grow, love

Chained by his certitudes, he is a slave

He has forfeited freedom

Only a person who risks is free

Author Unknown

2011-04-15T07:38:00.000-07:00

THINGS THAT REALTORS® WISH THAT BUYERS KNEW UP FRONT 1: Buying real estate today is not like the last time you bought real estate, and not like when your parents bought real estate. The rules have changed. A majority of the reasonably priced inventory on the market today is either bank owned (a foreclosure) or a short sale (a property that we are trying to sell for less than the owner owes on it. We have to get the bank/lender’s permission to do this. This bank/lender does not often have a reliable system in place to deal with our request, which means that short sales can be frustrating, bizarre, and unpredictable.) Understand that the bank/seller or bank/current lender in these situations does not care whether or not you buy this property. If you step away they know that somebody else will step up. The old back-and-forth negotiation rules that we all know and love will probably lose you a deal or two. Listen to your REALTOR®’s advice – this is not their first rodeo. 2: All real estate agents are not the same. About half of the real estate agents out there are just that – people licensed by the State of Arizona to sell real estate. The other half are REALTORS®. REALTORS® are also licensed to sell real estate. The difference is that REALTORS® have joined the National Association of REALTORS® (NAR), the Arizona Association of REALTORS® (AAR), and a local REALTOR® Association. If you are reading this, it was given to you by a member of the Sedona Verde Valley Association of REALTORS® (SVVAR). A REALTOR® has sworn to abide by the NAR Code of Ethics. If they have not sworn to adhere to the Code of Ethics they will not be allowed to be a member of any of these organizations. You can read the NAR Code of Ethics at http://www.realtor.org/mempolweb.nsf/pages/code Look for that big ®. It means that you are dealing with an ethical professional. It means that your REALTOR® is highly trained and regulated, and that you now have the Multiple Listing Service (MLS) and the REALTOR’S® Property Resource (RPR) at your disposal. 3: Zillow’s Zestimates (and their ilk) are not gospel. They’re usually not even very accurate. Zillow, Trulia, County Assessor’s property valuations – none of these tools are a reliable way to figure out what a particular property is worth. When you come to your REALTOR® and say “I want to offer the Zestimate price” you may or may not hear the gasp, but I’ll bet it was there. Zillow and the like are advertising sites, in the clever disguise of property valuation sites. Do you see those “Featured Partners” ads? Zillow makes money by selling those ad blocks, and they sell the ad blocks by getting people to come to Zillow hoping to get an insider’s scoop on property values. Your REALTOR® has something better. We can pull current, accurate, targeted valuations through MLS and RPR®, using the RPR REALTOR® Valuation Model. We know the neighborhoods and we know the properties. We can tell you what a property is worth and then we can prove it. 4: Your REALTOR® works on a commission basis. REALTORS® do not usually get a salary. We get paid when your deal closes. We spend thousands of dollars to get licensed and thousands more in dues and continuing education every year. Gas, vehicle maintenance, clothes, cards, paper, ink, computers, office, MLS fees, and SVVAR, AAR & NAR dues, all of this overhead is given to you on faith that you are real and are going to try to buy one of the properties that we show you. People who think “It’s fun to look, and a cheap way to spend a Sunday” with no intention of buying might as well just come into our homes and lift money from our wallets and take the food off of our tables. Also, expecting real estate agents to give up a piece of our commissions during the deal is not cool. Do you expect the barber to renegotiate the price of the haircut with you as he makes his last snip? 5: Buying real estate does not have to be a fight. Even though on paper this is an inherently adversarial process, in reality it doesn’t have to be. Some people say “Yeah, but they want to get the highest amount while I want to pay the least. Of course it’s adversarial!” I would counter with “You want to buy the property. They want you to buy the property. Your REALTOR® wants to help that to happen. Where’s the adversarial part?” Deals can get blown and relationships ruined by the attitude that we must squeeze the last drop of blood out of the “other side.” We must not leave even one smidgen of crumb on the table! Well, maybe you should leave that last crumb. Wouldn’t it be so much better after close of escrow if you felt comfortable calling up the seller and asking if they know why the trees are making that funny noise? 6. Your REALTOR® has the same fiduciary requirements to their clients that your attorney, priest, or doctor has. That’s right – a REALTOR®’s client can expect the same level of confidentiality from their REALTOR® as you expect from your priest. Our agency relationship with a client mandates:  Confidentiality  Accountability  Reasonable Care and Due Diligence  Loyalty  Obedience to lawful requests  Advocating and Good Advice  Disclosure 7: How do I become a client instead of just a customer? Ask for, read and then sign the Buyer’s Broker employment form with your REALTOR®. If you don’t, all that you can legally expect is disclosure. 8: Yes, consensual dual agency is legal in Arizona. Your REALTOR® is legally allowed to be both yours and “the other side’s” REALTOR®, as long as everybody involved is aware of what it means and agrees and gives written permission for them to do so by signing the Consent to Limited Dual Agency form. What does signing this form mean to you? It means that the REALTOR® sort of sits on the fence in between both parties, refereeing. The reality is that sooner or later you will ask a question (How much will they really take for this property?) that your REALTOR® will answer with, “I’m sorry. I’m not allowed to answer that.” Rest assured that the other guy will get the same answer when he asks that same question (How much will they really pay?). 9. A REALTOR® in Arizona is allowed to write contracts. We’re very highly trained in contract writing, and this is part of the service. If you want to run anything by your attorney, feel free. You don’t have to, but you certainly can. If you have any question, ask your REALTOR®. They’ll be happy to explain until you’re satisfied.

2011-04-06T11:14:00.000-07:00

That bow and arrow story.Around age 10 my dad got me one of those little badasscompound bow beginner kits. Of course, the first month I went around our land sticking arrows in anything that could get stuck by an arrow. Did you know that a 1955 40 horse Farmall tractor tire will take 6 rounds before it goes down? Tough sumbich.That got boring, so being the 10 yr. old Dukes of Hazard fan that I was, I quickly advanced to taking strips of cut up T-shirt doused in chainsaw gas tied around the end and was sending flaming arrows all over the place. One summer afternoon, I was shooting flaming arrows into a large rotten oak stump in our backyard. I looked over under the carport and see a shiny brand new can of starting fluid (Ether). The light bulb went off in my head. I grabbed the can and set it on the stump. I thought that it would probably just spray out in a disappointing manner. Lets face it, to a 10 yr old mouth-breather like myself, (Ether), really doesn't "sound" flammable.So, I went back into the house and got a 1 pound can of pyrodex (black powder for muzzle loader rifles). At this point, I set the can of ether on the stump andopened up the can of black powder. My intentions were to sprinkle a little bit around the (Ether) can but it all sorta dumped out on me. No biggie, a 1 lb. pyrodex and 16 oz (Ether) should make a loud pop, kinda like afirecracker you know? You know what? Screw that. I'm going back in the house for the other can.Yes, I got a second can of pyrodex and dumped it too. Nowwe're cookin'!I stepped back about 15 ft and lit the 2 stroke arrow. Idrew the nock to my cheek and took aim. As I released I heard a clunk as the arrow launched from my bow. In a slow motion time frame, I turned to see my dad getting out of the truck... OH SHIT! He just got home from work. So help me God it took 10 minutes for that arrow to go from my bow to the can. My dad was walking towards me in slow motion with a WTF look in his eyes. I turned back towards my target just in time to see the arrow pierce the starting fluid can right at the bottom. Right through the main pile of pyrodex and into the can. Oh Shit.When the shock wave hit it knocked me off my feet. I don'tknow if it was the actual compression wave that threw me back or just reflex jerk back from 235 fricking decibels of sound. I caught a half a millisecond glimpse of the violence during the initial explosion and I will tell you there was dust, grass, and bugs all hovering 1 ft above the ground as far as I could see. It was like a little low to the ground layer of dust fog full of grasshoppers, spiders, and a worm or two.The daylight turned purple. Let me repeat this... THE FRICKING DAYLIGHT TURNED PURPLE.There was a big sweetgum tree out by the gate going into the pasture. Notice I said "was". That son-of-a-bitch got up and ran off. So here I am, on the ground blown completely out of my shoes with my thundercats T-Shirt shredded, my dad is on the other side of the carport having what I can only assume is a Vietnam flashback:ECHO BRAVO CHARLIE YOU'RE BRINGIN' EM IN TOO CLOSE!! CEASE FIRE. DAMNIT CEASE FIRE!!!!!His hat has blown off and is 30 ft behind him in thedriveway. All windows on the north side of the house are blown out and there is a slow rolling mushroom cloud about 2000 ft. over our backyard.There is a Honda 185 3 wheeler parked on the other side of the yard and the fenders are drooped down and are now touching the tires. I wish I knew what I said to my dad at this moment. I don'tknow - I know I said something. I couldn't hear. I couldn't hear inside my own head. I don't think he heard me either... not that it would really matter. I don't remember much from this point on. I said something, felt a sharp pain, and then woke up later. I felt a sharp pain, blacked out, woke later....repeat this process for an hour or so and you get the idea. I remember at one point my mom had to give me CPR. and Dad screaming "Bring him back to life so I can kill him again". Thanks, Mom.One thing is for sure... I never had to mow around thatstump again, Mom had been bitching about that thing for years and dad never did anything about it. I stepped up to the plate and handled business.Dad sold his muzzle loader a week or so later. I still havesome sort of bone growth abnormality, either from the blast or the beating, or both.I guess what I'm trying to say is, get your kids intoarchery. It's good discipline and will teach them skills they can use later on in life.Author Unknown

2011-04-01T08:56:00.000-07:00

In today’s market, every savvy seller wants to know what turns buyers off so they can get their homes sold as quickly as possible for as much as possible. But buyers, take note – there is a minefield of seller turn-offs you can trigger that hold the potential to keep you from getting the home you want at the best price and terms, or to unnecessarily complicate dealings with your home’s seller. Lest you think all of today’s sellers are under the gun and will just put up with whatever behavior buyers dish out, be aware that there are still many multiple offer situations in which buyers have to compete with each other to get a home – buyers who trigger these turnoffs tend to lose in those scenarios. Also, avoiding these seller turnoffs can create a transactional environment of cooperation and avoid things turning adversarial. That, in turn, can empower you to score a better price, get extra items you want thrown into the deal, and even negotiate more flexibility around your escrow and move-in timelines – all perks that can make your life easier and your budget go further. For sellers, these turnoffs pose the potential of irritating you out of an otherwise good deal – maybe even the only deal you have! Here are a few of the most common buyer-perpetuated seller turnoffs, with tips for sellers on how to keep an emotional (and economic) even keel, even if your home’s buyer makes some of these waves: 1. Trash-talking. Trash-talkers are the home buyers who think they’re going to negotiate the list price down by slamming the house, telling the sellers how little it is really worth, how the house across the street sold for nothing, why the school on the corner should make them desperate to give the place away, etc. This strategy never works; in fact, when you attack a seller and their home, you only cause them to be defensive, and think up all the reasons that (a) their home is not what you say it is, and (b) they shouldn’t sell their home to you! Sometimes this happens with buyers who actually love a house and just walk around it fantasizing about all the ways they would customize it to their tastes while a seller is there. Sellers: avoid being at home while your home is being shown. Buyers: save your commentary for your agent; if you do encounter the seller in person keep your conversation respectful and avoid critiquing the house or the list price. 2. Being unqualified for mortgage financing. When a seller signs a buyer’s offer, most often the seller agrees to effectively pull the home off the market, forgoing other buyers who might be interested. As such, the only thing worse than getting no offers on your home is getting an offer, getting into contract, then having the whole thing fall apart when the buyer’s loan falls through – especially if that could have been predicted or avoided up front. Sellers: Work with your agent to vet your home’s buyers’ qualifications, including their loan approval, down payment and earnest money deposit – before you sign a contract. It’s not overkill for your agent to call the buyers’ mortgage pro before you sign the contract and get a level of comfort for how robust their qualifications are. Buyers: Get pre-approved. Seriously. And make sure that you don’t buy a car, quit your job, deposit lottery winnings or do any other financial twitchery between the time you get loan approval and the time you close escrow on your home. (Note: in Arizona a REALTOR® will require that a Buyer furnish a pre-approval form filled out by the Buyer's lender.) 3. Making unjustified lowball offers. No one likes to feel like they are being taken advantage of. And sellers generally know the ballpark amount that their home is worth, as well as what they need to sell it for to get their mortgage paid off. Yes – the price you pay for a home should be driven by its fair market value, rather than the seller’s financial needs, and deals are more available in a market like the current one, in which supply so vastly outpaces demand. But just throwing uber-lowball offers out at sellers hoping one will hit the spot is not generally a successful strategy, especially if you really, really want a given property. Sellers: Don’t get overly emotional about receiving a lowball offer; counter at the price you and your agent decide makes sense based on the total circumstances, including your motivation level, recent comps and the interest/activity level your listing is receiving. Buyers: Work through the similar, nearby homes that have recently sold (a/k/a comparables) before you make an offer to factor the home’s fair market value into your offer price – also factor in how much you want the place, too. Don’t be amazed if you make an offer far below asking, and don’t get a response. 4. Renegotiating mid-stream. Sellers plan their finances, moves and - to some extent – their lives around the purchase price a buyer agrees to pay for their home. If you get into contract to buy a home, find out during inspections that costly repairs need to be made, then propose a lower sale price, repair credit or even actual repairs to the seller, that’s sensible and fair. But if you were aware that the property needed a lot of work before you made an offer on it, then you come back asking for beaucoup bucks’ worth of credit or price reductions midstream, expect the seller to cry foul. And holding the seller up two weeks into the transaction because you caught a case of buyer's remorse? Not cool, and not likely to foster the spirit of cooperation you may need to get your deal closed. Sellers: avoid mid-stream price renegotiations by having a full set of inspection reports and repair bids at hand when you list your home. Buyers: try to avoid renegotiating the entire deal unless you get some major surprises at your inspections or inflating small repairs to try to justify a major price cut. 5. Misleading or setting the seller up. Remember when we talked about buyer turn-offs? Being misled by listing photos or very fluffy property descriptions was high on the list. The same goes for sellers.Offering way over asking with the plan to hammer the seller for a reduction when the house doesn’t appraise at the purchase price? #LAME Making an as-is offer planning the whole time to come back and ask for every penny ante repair called out by the inspectors? Lame squared. Sellers: If you get multiple offers and are tempted to take a sky-high one or one that claims to be all cash, consider requesting proof that the buyer has sufficient funds to make up the difference between what you think the home will appraise for and the actual sale price, and statements showing the cash truly exists. Buyers: Don’t be lame. I’m not saying you have to tell the seller exactly what your top dollar is, but making offers with terms designed to intentionally mislead is really, really bad form – and can result in losing the home entirely if and when your bluff gets called.

2011-03-17T13:39:00.000-07:00

You know Suze Orman - she delivers hardcore financial gut checks to everyday Americans on a regular basis. In her latest book, The Money Class, she also recently delivered a pretty striking declaration: that the American Dream - which, for many, includes home ownership and upward economic mobility - is as dead as a doornail. To back this up, she points to huge numbers of jobless and what she sees as the near impossibility of getting credit these days.

But you might also have heard of Warren Buffett. He just so happens to be the third richest human being on the planet. In Buffett's most recent letter to his company's shareholders, he, too, made a striking declaration of his feelings about owning a home: "[h]ome ownership makes sense for most Americans, particularly at today’s lower prices and bargain interest rates." And the Oracle of Omaha didn't stop there - he literally raved about home ownership, saying that "the third best investment I ever made was the purchase of my home."
Now, that's a big statement from a guy whose investment decisions have earned him a net worth over $50 billion!

Suze says the American financial dream is dead. But Buffett says buy, and buy now. Who's right? (And who's wrong?!)

Orman is right that one extreme version of the American Dream is dead. But not the traditional American Dream of owning an affordable home that appreciates over time. That basic premise of the value of homeownership is valid. But it may be valid for a smaller segment than ever before. Orman believes that renters should save, save, save up every penny and they may never be a candidate to own a home.

Buffett believes now is the time to purchase as affordability has never been better. Buffet wins here; he's right that a home is a very strong investment, with abundant yields, both financial and emotional. And according to our latest survey, the American Dream of homeownership lives on in the hearts of the 72 percent of Americans who say owning the place they live is a part of their personal American Dream. How can you make sure your exercise in owning a home is set up to be like Buffett's 3rd best investment (#s 1 and 2 were wedding rings, btw), rather than Orman's image of the American nightmare?

Here are 3 basic steps Buffett urges every American who owns a home - or wants to - to include in their approach to home ownership.

1. Ditch your "dream home" for a practical pad. When it comes to homes and mortgages, bigger is not always better. What is better is to buy a home that makes sense for your family's future and its finances. In Buffettt's own words, "a house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender . . . facilitates his fantasy." Instead of buying dream homes, Buffett went on, the goal should be to buy a home you can afford.

2. When you buy, plan to hold. Warren Buffett is worth $50 billion, and he still lives in the home he bought 52 years ago - for $31,500. Many Americans got caught in the housing crash when they took on mortgages they could only sustain for a short period of time, then weren't able to refinance as expected. Buffett's stock investing advice has long been to avoid making investments you can't hold for at least 10 years. Likewise, buying a home should be done with a long-term plan to avoid catastrophe when home values fluctuate in the short term.

3. Mortgages should have fixed, affordable payments. In his shareholder letter, Buffett points out that a housing company he holds has done vastly better than other real estate and mortgage industry players and attributes their success to the fact that "our approach was simply to get a meaningful down-payment and gear fixed monthly payments to a sensible percentage of income." Buffett believes these two mortgage musts are the key to avoiding foreclosure, opining that "[i]f home buyers throughout the country had behaved like our buyers, America would not have had the crisis that it did. . .. This policy kept [the company] solvent and also kept buyers in their homes." Unless you are one of those rare buyers who know their income will increase by a predictable amount at a predictable point in time, like a lawyer prepping for partnership, a good rule of thumb is to stick with a fixed mortgage payment (including taxes and insurance) that's under 30 percent of your take home income.

banker morons

2011-03-15T12:19:00.000-07:00

My response to a Verde Valley homeowner who made the mistake of asking "How's the market? Can I sell my house yet? What's the percentage of foreclosures?"

Hi, Viktoria. The market is.......can I borrow your words and say "so-so?"
The foreclosures are rampant. The percentages don't really matter because foreclosures are at the bottom of any price range and that's naturally where the buyers go - to the cheapest. I would, too.

"Real" people and "normal" sales all have to wait until the foreclosures are gone, or else compete down there at the bottom. The banks don't care - they'll get bailed out. They just keep undercutting the prices and driving the comps and the market lower every day.

I realize that my sentiments are not what the media is portraying, but this is what I'm seeing.

If a bank-owned house has a fair market value of, say, $100,000 then the bank/owner says "List it at $75,000! Get rid of it!" Then the next bank/owner of an identical house now has a value of $75,000 because that's the comp. And so they say "List it for $50,000! Get rid of it!"

You see where this is going, I'm sure. They're shooting themselves in the foot, and in doing so they're shooting Americans in the head.

Sorry. I do go off on rants when this subject comes up, the banker morons.

Lenten prayer

2011-03-10T08:23:00.000-08:00

Fast from judgment, Feast on compassion
Fast from greed, Feast on sharing
Fast from scarcity, Feast on abundance
Fast from fear, Feast on peace
Fast from anxiety, Feast on patience
Fast from evil, Feast on kindness
Fast from apathy, Feast on engagement
Fast from discontent, Feast on gratitude
Fast from noise, Feast on silence
Fast from discouragement, Feast on hope
Fast from hatred, Feast on love

2011-03-10T07:37:00.000-08:00

In a mortgage market that changes as quickly as this one, today’s fact is tomorrow’s fiction.

For buyers, misinformation can be the difference between qualifying for a home loan or not.

Sellers and owners, knowledge is foreclosure-preventing, smart decision-making power!

Without further ado, let’s correct some common mortgage misconceptions.

1. Myth: Buyers with bad credit can’t qualify for home loans.
Obviously, mortgage guidelines have tightened up, big time, since the housing bubble burst, and they seem likely to tighten even further over the long-term. But just this moment, they have relaxed a bit. In the last couple of weeks, two of the nation’s largest lenders of FHA loans announced that they’ve dropped the minimum FICO score guideline from 620 (which allows for some credit imperfections) to 580, which is actually a fairly low score.
At a FICO score of 620, buyers can qualify for FHA loans at many lenders with only 3.5 percent down. With a score of 580, the lenders are looking for more like 5 to 10 percent down – they want to see you put more of your own skin in the game, and the higher down payment lowers the risk that you’ll default. However, if your credit has taken a recessionary hit, like that of so many Americans, this might create a glimmer of hope that you’ll be able to take advantage of low prices and interest rates without needing years of credit repair.

2. Myth: The Mortgage Interest Deduction isn’t long for this world.
Homeowners saved over $85 billion in 2008 by deducting their mortgage interest on their income tax returns. A few months ago, the National Commission on Fiscal Responsibility and Reform caused a massive wave of fear to ripple throughout the world of real estate consumers and professionals when they recommended Mortgage Interest Deduction (MID) reform, which would dramatically reduce the size of the deduction.Fact is, the Commission made a sweeping set of deficit-busting recommendations to Congress, a few of which are likely to be adopted. Fortunately for buyers and sellers, MID reform is not one of them. Very powerful industry groups and economists have been working with Congress to plead the case that MID reform any time in the near future would only handicap the housing recovery. Congress-folk aren’t interested in stopping the stabilization of the real estate market. As such, the MID is nearly universally thought of as safe – even by those who disagree that it should be.

3. Myth: It’s just a matter of time before loan guidelines loosen up.
The US Treasury Department recently recommended the elimination of mortgage industry giants Fannie Mae and Freddie Mac. I won’t get into the eye-glazing details of it here, but the long and the short is that (a) this is highly likely to happen, and (b) it will make mortgage loans much harder and costlier to get, for both buyers and homeowners. It’s possible that loans are as easy to get as they’re going to get. So don’t expect that if you hold out, zero-down mortgages will continue.

4. Myth: If you don’t have equity, you can’t refi.
Much ado is being made about how stuck so many people are in their bad loans, because they don’t have the equity to refinance their way out of them. If you’re severely upside down (meaning you own much, much more than your home is worth), stuck may be the situation.
But there are actually a couple of ways homeowners can refi their underwater home loans. If your loan is held by Fannie or Freddie (which you can find out, here), they will actually refinance it up to 125% of its current value, assuming you otherwise qualify for the loan. That means, if your home is worth $100,000, you could refinance a loan up to $125,000, despite the fact that your home can’t secure the full amount of the loan.If your loan is not owned by Fannie or Freddie, you might be a candidate for the FHA “Short Refi” program. While most mortgage workout plans are only available to people who are behind on their loans, the Short Refi program is only available to homeowners who are current on their mortgages and need to refinance up to 115 percent of their homes’ value.
So, if you owe $250,000 on your home, you can refinance via an FHA Short Refi even if your home’s value is as low as $217,000. If you think you’re a good candidate for a short refi, contact your mortgage broker, stat – there are some in Congress who think that this program is so underutilized (only 245 applications have been submitted since it rolled out in September – no typo!) that its funding should be diverted to other needy programs.

5. Myth: If you’ve lost your job and can’t make your mortgage payment, you might as well mail your keys in.
Until recently, this was essentially true – virtually every loan modification and refinancing opportunity required that your economic hardship be over before you could qualify. And documenting income has always been high on the requirements checklist. But there are some new funds available in the states with the hardest hit housing and job markets, which have been designated specifically for out-of-work homeowners.The US Treasury Department’s Hardest Hit Fund allocated $7.6 billion to the states listed below – all of which are now using some portion of these funds to offer up to $3,000 per month for up to 36 months in mortgage payment assistance to help unemployed homeowners avoid foreclosure. Contact the state agency listed below if you need this sort of help:
Alabama: http://www.hardesthitalabama.com/
Arizona: https://www.savemyhomeaz.gov/
California: https://www.keepyourhomecalifornia.org/
Florida: https://www.flhardesthithelp.org/
Georgia: http://www.dca.state.ga.us/housing/homeownership/programs/hardesthitfund.asp
Illinois:http://www.ihda.org/
Indiana: http://www.877gethope.org/
Kentucky: http://www.kyhousing.org/
Michigan: http://www.michigan.gov/mshda/buyers/save_the_dream/helping+hardest+hit+homeowners+-+contact+your+mortgage+servicer+for+assistance
Mississippi: http://www.mshomecorp.com/firstpage.htm
Nevada: http://www.nahac.org/
New Jersey: http://www.state.nj.us/dca/hmfa/home/foreclosure/homekeepers.html
North Carolina: http://www.ncforeclosureprevention.gov/
Ohio: http://www.savethedream.ohio.gov/
Oregon: http://www.oregonhomeownerhelp.org/
Rhode Island: http://www.hhfri.org/
South Carolina: http://www.scmortgagehelp.com/
Tennessee: http://www.thda.org/
Washington D.C.: http://www.dchfa.org/

Buyer turn-offs

2011-02-24T06:59:00.000-08:00

Here are 6 big-time homebuyer turn-offs that make buyers cringe at the thought of your home, and action steps you can take to prevent your home from being an offender:

1. Stalker-ish sellers.

I know you think you’re being helpful, walking the buyer through your home and pointing out the wagon-wheel light fixture you made with your own two hands, the custom mural of a stingray you paid top dollar to have painted across your living room wall and the way the sounds of happy schoolchildren running across the front yard of your corner lot to get to the school in the next block lifts your spirits. However, the buyers might be trying really hard to ignore, minimize or figure out how to undo the very features of your home you hold dear. They also may want or need to have personal space and conversations with their mate or their agent while they’re viewing your home - you being there, especially walking right alongside them while they’re in your home, prevents them from being comfortable about doing this, or discussing all the things they would change if the home were theirs. In my experience, the more nitpicky a buyer gets about a house and the more detailed their list of things they would change, the more serious they are about considering making an offer on this place.
What’s a Seller to do? Back off. Let your home be shown vacant, or leave the house when people come to see it. If you need to be there, at least walk outside or go sit at the coffee shop down the way while prospective buyers view your home. If the buyers have questions, their people will contact your people.

2. Shabby, dirty, crowded and/or smelly houses.

You already know this one. Yet, buyers constantly marvel. The buyers who come to see your home are making the decision whether to choose your home for the biggest purchase they’ve ever made during the worst economic conditions most of them have ever experienced. Your job is to get your home noticed – favorably – above the sea of other homes on the market, many of which are priced very, very low.
What’s a Seller to do? Other than listing your home at a competitive price, the only tool within your control for differentiating your home from all the foreclosures and short sales is to show it in tip-top shape. Pre-pack your place up, getting rid of as many of your personal effects as possible. Do not show it without it being completely cleaned up: no laundry or dishes piled up, countertops freshly washed, smelly dogs (I have a couple who smell on occasion – no judgment – but don’t show your house with pet odors) or litter boxes cleaned and/or out of the house.

3. Irrational seller expectations (i.e., overpricing).

Buying a house on today’s market is hard work! On top of all the research and analysis about the market and situating their own lives to be sure they’ll be able to afford the place for 5, 7, 10 years - or longer, buyers have to work overtime to separate the real estate wheat from the chaff, get educated about short sales and foreclosures and often put in many, many offers before they get even a single one accepted. The last thing they want to add to their task lists is trying to argue a seller out of unreasonable expectations or pricing. And, in fact, there are so many other homes on the market, buyers don’t have to do this. When they see a home whose seller is clearly clueless about their home’s value and has priced it sky-high, most often they won’t bother even looking at it. If they love it, they’ll wait for it to sit on the market for awhile, hoping the market will “educate you” into desperation, priming the pump for a later, lowball offer.
What’s a Seller to do? Get real. Get out there and look at the other properties that are for sale in your area and price range. Get multiple agents’ take on what your home should be listed at, and don’t take it personally if their recommendation is low. If your home has much less curb appeal or space or is much less upgraded than the house across the way, don’t list it at the same price and expect it to sell. If you owe more than your home is realistically worth, you may need to reexamine whether you really want or need to sell, or consider a short sale, if you simply have to sell. Don’t be tempted into testing your market with an obviously too-high price, unless you’re prepared to have your home lag on the market and get lowball offers.

4. Feeling misled.

Here’s the deal. You will never trick someone into buying your home. If the listing pics are photo-edited within an inch of their lives, or your home is described as an “approved” short sale when, in fact, the bank approved another offer, now withdrawn, but will require a new offer to go through any sort of approval process (even a truncated one), buyers will learn this information at some point. If your neighborhood is described as funky and vibrant, as code for the fact that your house is under the train tracks and you live in between a wrecking yard and a biker bar, prospects will figure this out. If the detailed information about your home, neighborhood or even transactional position (e.g., short sale status, seller financing, etc.) is misrepresented, the sheer misrepresentation will turn otherwise interested buyers off. If you authorize your agent to “verbally approve” the buyer’s offer, don’t go back the next day demanding an extra $5,000. In cases where the buyer feels misled, whether or not that was your intention, running through the buyer’s mind is this question: If they can’t trust you to be honest about this, how can they trust you to be honest about everything else?
What’s a Seller to do? Buyers rely on sellers to be upfront and honest – so be both. If your home has features or aspects that are often perceived negatively, your home’s listing probably shouldn’t lead with them (like the ad I recently saw with the intro line: “this place is a mess!”), but neither should you go out of your way to slant or skew or spin the facts which will be obvious to anyone who visits your home. Make sure you know what the listing of your home reads like, before it’s published to the web, and that a prospective buyer will not feel misled by it.

5. New, ugly home improvements.

Many a buyer has walked into a house that has clearly been remodeled and upgraded in anticipation of the sale, only to have their heart sink with the further realization that the brand-spanking-new kitchen features a countertop made, not of Carerra marble, but brand-new, pink tiles with a kitty cat in the middle of each one (I saw this once, people – no joke). Or the pristine, just-installed floors feature carpet in a creamy shade of blue – the buyer’s least favorite color. New home improvements that run totally counter to a buyer’s aesthetics are a big turn-off, because in today’s era of Conspicuous Frugality, buyers just can’t cotton to ripping out expensive, brand new, perfectly functioning things just on the basis of style – especially since they’ll feel like they paid for these things in the price of the home.
What’s a Seller to do? Check in with a local broker or agent before you make a big investment in a pre-sale remodel. They can give you a reality check about the likely return on your investment, and help you prioritize about which projects to do (or not). Instead of spending $40,000 on a new, less-than-attractive kitchen, they might encourage you to update appliances, have the cabinets painted and spend a few grand on your curb appeal. Many times, they will also help you do the work of selecting neutral finishes that will work for the largest possible range of buyer tastes.

6. CRAZY listing photos (or no photos at all).

We’ve seen listing photos that have dumpsters parked in front of the house, piles of laundry all over the “hardwood” floors touted in the listing description, and once, even the family dog doing his or her business in the lovely green front yard. Listing pictures that have put your home in anything but its best, accurate light are a very quick way to ensure that you turn off a huge number of buyers from even coming to see your house! The only bigger buyer turn-off than these bizarre listing pics are listings that have no photos at all; most buyers on today’s market see a listing with no pictures and click right on past it, without giving the place a second glance.
What’s a Seller to do? Check your home’s listing and make sure that the pics represent your home well. If not, ask your agent to grab some new shots and get them online (and say pretty please, pretty please!).

Tara-Nicholle Nelson

INSIDER SECRETS TO BUYING A HOME

2011-02-22T06:59:00.000-08:00

By Tara-Nicholle Nelson
Buying a home is not a discrete event; it's a process - a sequence of events that happens over time, sometimes over as long as several months or even years!
While general guides to buying a home are a dime a dozen, I'm excited to share with you some insider secrets you may not have heard elsewhere - one for each stage involved in buying a home. Here's to helping you make the best decisions at every phase of your homebuying process!

Stage One: Deciding Whether It's The Right Time to Buy.
Insider Secret: The market is the least important factor you should consider when deciding whether and when to buy a home.
Why? Everyone knows affordability is at an all-time high. Home prices are low, and so are interest rates. But trying to time the market is a fool's errand; many who get caught up in that game of trying to make sure they buy at the absolute bottom will end up losing out on very, very favorable conditions.
Beyond that, the most important considerations when deciding whether and when you should buy a home are personal, not market driven. On today's market, it only makes sense to buy a place if it's going to be sustainable and work for you for at least the next 4-5 years [if your town's real estate market has been fairly recession-proof] or 7-10 years [if the housing/foreclosure crisis has hit your area pretty hard].
Against this "smart holding period" backdrop, smart buyers decide to buy when it makes sense for:
their life plans (i.e., they are comfortable making the commitment to live in the same town, and the commitment to )
their family plans (i.e., whether they plan to get married, have children or empty their nest in the time they plan to own the home - and the implications of these plans on their space needs and location priorities)
their career plans (including, but not limited to: whether they have job or income security, whether they feel they will be working in the same area for the foreseeable future, and whether they want to work less or start their own business in the months or years to come)
their financial plans (including foreseeable changes in income and expenses, e.g., kids going to college or making partner at the firm).

Stage Two: Getting Pre-Approved.
Insider Secret: Working with a mortgage broker referred by your real estate broker or agent may save you money.
Why? Bolstered by the real-life stories of a couple of bad apples, TV pundits and some consumer advocates have spun the tale of a real estate industry cartel, whereby sinister agents hook unsuspecting buyers up with shady mortgage brokers, who place them in crappy loans and kick back some bucks to the agent.
I'm here to tell you, in my experience the opposite is true the vast majority of the time. When you work with a mortgage broker who has a strong track record of helping your real estate agent's clients out, you end up in a best of all worlds situation nine times out of ten.
First off, your agent will take you much more seriously once a mortgage broker they know and trust has run your credit, checked your income and approved you for a loan, as well as communicated with your real estate pro about your qualifications and what you can afford. Secondly, your agent can help you communicate with your mortgage broker, sometimes helping get past appraisal glitches or facilitating other workarounds, as they come up. Third, you get the assurance of working with a mortgage pro who has been vetted and vouched for by someone you not only trust, but someone who can verify that the mortgage broker has the ability to get transactions closed in the timely manner required of today's real estate sales contract. Otherwise, you may end up working with a competent mortgage broker who has a great track record when it comes to refinancing, but can't keep up with the pace and common obstacles to getting a home financed in the context of a sale.
On top of that, sometimes the relationship can help you negotiate out of a couple of line item loan fees (if your particular mortgage rep has the power to get them down at all), if push comes to shove and cash is tight to close the deal. Assuming you are working with a real estate pro you really trust, working with a mortgage broker they trust can save you, rather than cost you, money.

Stage Three: House Hunting
Insider Secret: "Distressed" doesn't always equal "discounted" - in some cases, a "regular" sale can be a deeper deal.
Why? Short sales and foreclosures have grown to comprise roughly 30 percent of the homes sold on today's market, even higher in some areas. The average sale price of foreclosed homes was 32% lower than the average sale price of non-foreclosed homes, at last count. However, it's not always the case that foreclosed homes or short sales - homes which are being sold for less than what the seller owes on their mortgage(s) - offer the buyer a fabulous discount.
Mortgage servicers and asset managers who make decisions about distressed properties are on the hook to their investors to recoup as close as possible to the current fair market value of every home they sell. Some banks even have a general rule of rejecting offers more than 10 percent or so below the home's list price, preferring instead to reduce the price by that amount and put the home back on the open market to see if any new buyers are activated by the price reduction to make an offer better than the lowball offer that was initially put on the table.
On short sales, the bank is trying to get as close as possible to recovering what the seller owes - and may or may not be concerned with what the fair market value of the home is. (Nine times out of ten, there will be a big gap between fair market value and the seller's outstanding mortgage balance. If there wasn't, the seller wouldn't need to do a short sale!)
With so many distressed properties and homes with depressed values on the market, in many areas, the individual, non-distressed home sellers who are putting their homes up for sale right now are those who are very motivated to sell. Further, they are more likely to be flexible with you on everything that is negotiable, from contingency and escrow periods, to price, to repairs and included items. Also, individual sellers can be emotionally motivated to sell to move on with their lives, get into their bigger (or smaller) house, or move on to their next job; banks, on the other hand, aren't people (!), so lack that emotional sense of urgency to get the properties sold, no matter how urgently you may think they should be trying to get rid of the foreclosed properties they own. (If you've heard the old advice that banks don't want to be in the home-owning business, I can tell you this. That is true, in a very general sense, but now they are and will be - for a long time to come. They have no emotions, have no urgent need to sell or move, and are not willing to give houses away at pennies on the dollar to get out of it, no matter what those infomercial folks say.)
Long story short: you can sometimes negotiate a better deal with an individual seller on a "regular" sale than with a bank on a distressed home sale. So, don't limit your house hunt to foreclosures and short sales, if you're looking for a good deal on your home.

Stage Four: Negotiations
Insider Secret: Your family and friends can cause you to lose your dream home.
Why? With so much information on the web and the news every day about the recession and the buyer's market, everyone seems to be an armchair economist/real estate savant. But much of that news is national and based on medians, averages and trends. That is, it might not necessarily apply to every home on the market in every city, and more importantly, it might have nothing to do with "your" particular home.
When I was a little girl, my best friend's grandfather would very carefully hand each of us a quarter, always doling it out with the sage admonition: "Don't spend it all in one place." We'd always smile, look at each other, then go ask our Moms for ten bucks apiece. In the same vein, people who are not currently in the market for a home have no idea what an individual home should "go for."
If you tell your parents, church pals, or colleagues at work the blow-by-blow details of your offer, counteroffers, etc., you should expect to hear things like, "Oh, you're paying way too much!", "I think you should push them down another $10K," or "You know, you're in a better bargaining position than that." And sometimes, taking that sort of advice will end up blowing your deal. Work with your trusty real estate broker or agent to develop a smart strategy - with their experience in your local market - about what price and terms to offer. Then keep working with them to manage and maintain realistic expectations as you proceed through negotiating the contract to buy your home.

Stage Five: Escrow, Inspections and Underwriting
Insider Secret: It's critical that you attend your home inspections.
Why? When it comes to inspections, many first-time buyers expect that a home will either pass or fail. Except in a few jurisdictions where the government imposes certain condition requirements for a home to be sold, the home inspection is more about educating you, the buyer, as to the details and nuances of the home's condition than about seeing if the place hits a particular target for "good" or "bad" condition.
Home inspectors don't just look for things that need fixing, they also look to understand the home's systems and features, as well as to point out areas that will require your ongoing maintenance, highlight emergency shutoffs and other need-to-knows, and indicating where you should have specialists further inspect items of concern. Many home inspectors create vivid, detailed electronic reports - some, complete with color photos.
But that's not enough! If you're physically onsite at the home during the inspections, the inspector can physically show you the shutoffs for water, gas and electric - and how to use them. They can also point out, in person, any things that need repair, and give you some tips for maintaining the place in tip-top shape.
Also, in many states, the general home inspector is legally prohibited (vs. the pest, roof or other "specialty" inspectors) from issuing a written quote or bid for repairs, to avoid a conflict of interest where they'd try to fabricate flaws in the home to get the repair job. However, the repair costs are one of the most important things a smart buyer wants to know! If you show up, many inspectors will give you a rough range it would cost you to do various repairs, or otherwise indicate to you whether the needed repairs are "big deal" or "$10 home improvement store" fixes; some will even give you a few references to contractors they trust.
All around, you'll get much more of the detailed information you need to know whether and how to move forward with the transaction if you should up in person to the home inspections, rather than just waiting for a copy of the report to come to your email.

2011-02-17T07:14:00.000-08:00

To get the most impact and to help you fully understand the passion behind the words, you should read this out loud so you can hear your own voice as if you are speaking to yourself. You and you alone have the power to make anything you want a reality. There is nothing you can't do!

Your quality of life is and always has been about the choices you make. Everything good that has happened to you is because of the choices you have made; unfortunately, everything not so good that has happened to you could have been avoided if you would have made better choices.

What choices will you make today?

You have the ability to create and predict the outcome of your day because of the choices you are about to make.

Will you choose to tackle your to-do list today, or will you settle for being average and procrastinate like most of society? I WILL TACKLE MY TO-DO LIST.

Will you choose to have conflict with your co-workers today, or will you rise above and try and be the bright spot in their day and only speak encouraging and positive words. I WILL NOT HAVE CONFLICT TODAY; I WILL BE ENCOURAGING TO OTHERS TODAY.

Will you choose to avoid calling that difficult customer who always brings you down, or will you conquer that phone call and find a solution that will make them happy or at the very least satisfy their concerns. I WILL DO MY BEST TO SATISFY MY CUSTOMER.

Will you choose to be a better manager today; manager of your people, manager of your time, and manager of your day? YES I WILL! I WILL BE A BETTER MANAGER OF PEOPLE TODAY; I WILL MANAGE MY TIME AND MYSELF BETTER TODAY. YES I WILL.

Will you choose to be a better parent, significant other, son or daughter today? YES I WILL BE A BETTER PARENT, BETTER TO MY SPOUSE, BETTER AND MORE UNDERSTANDING TO MY KIDS. YES I WILL.

Is your day important enough to you to try and improve, to try and be better at everything you set out to do? Will you be willing to stop complaining about unimportant things today that you have no control over? Will you stop being complacent and face up to the fact that you hate being average? Are you willing to try harder, work harder and make your day more significant?

YES I WILL. I AM DARN TIRED OF BEING AVERAGE, I WILL WORK HARDER, I WILL TRY HARDER, I WILL STOP COMPLAINING AND TAKE RESPONSIBILITY AND ACCOUNTABILITY FOR WHAT IS ABOUT TO HAPPEN TODAY.

Are you willing to stand up and stand for something you believe in regardless of peer pressure or what others think of you? Are you willing to show your competition and your critics that you truly believe it when you say "There is nothing I can't do”,” There is nothing I can't do”,” There is nothing I can't do"?

YES, I AM THAT CONFIDENT IN MYSELF TO TRULY BELIEVE THAT "THERE IS NOTHING I CAN'T DO".

Are you willing to admit that being average is easy, and you will not be average anymore.

YES, I AM GREAT TODAY. I CHOOSE TO BE GREAT TODAY. I CHOOSE TO BE GREAT TODAY BECAUSE "THERE IS NOTHING I CAN'T DO".

I AM THE CHOICE AND I CHOOSE TO BE GREAT TODAY.

I WILL NOT WAIT FOR MY NEXT LIFE TO BE GREAT, I CHOOSE NOW, I CHOOSE TODAY.

I CHOOSE TO WIN, TO WIN, TO WIN, TO WIN AND TO INCORPORATE THE ATTITUDE, "THERE IS NOTHING I CAN'T DO".

TODAY I CHOOSE TO CREATE MY OWN ECONOMY, I CHOOSE NOT TO BE A VICTIM OF OUR SOCIETY, I WILL BE SIGNIFICANT, I WILL MAKE A DIFFERENCE NOT ONLY IN MY OWN LIFE BUT EVERYONE AROUND ME. I CHOOSE TO BE GREAT TODAY, I CHOOSE TO BE GREAT TODAY, I CHOOSE TO BE GREAT TODAY... WHY... BECAUSE "THERE IS NOTHING I CAN'T DO".

Print this out, make it your mission, own it! Read this out loud everyday with passion and conviction, with love from your heart, visualize it, live it, make it your own.Make another choice today and refer me to speak to anyone, any company or organization you may know that needs to be better, more profitable, more business growth and more attitude and gratitude building.

cut/copy and paste

2011-02-08T08:10:00.000-08:00

A friend asked, "Can you give me a step-by-step on "cut and paste" ???

Sure. There are 2 ways:

I prefer "copy and paste" over "cut and paste" because sometimes I think twice. Truly. (Cut and paste takes the stuff off of your screen and puts it into your mouse. Copy and paste leaves it where it was and then duplicates it somewhere else, so that if you like the finished product you can then delete what was there before. No biggie - it's up to you.)

Don't panic - practice.

Check that your mouse has 2 buttons, one for your index finger and one for your middle finger. Really - I'm not making this up..............

If so, look at the sentence above.

Put your cursor (the pointer thing, the arrow, or the line that looks like an I-Beam) at the end of that sentence.

Push down on the index finger button.

Drag it over the sentence, highlighting the sentence.

Release your index finger. The sentence should have a blue highlight.
Now click the middle finger button.

A menu will pop up.

See "copy?"

Click it.

Now take your cursor to where you want those words to be.

Click the middle finger button again.

See "paste?"

Click paste.

The words will magically appear.

Delete the words from where they were before.

If you don't have 2 mouse buttons, in the parts where I said "Use your middle finger" just go to the top of your computer screen. Click "edit." You'll get the same cut and paste menu.

Or, go to youtube and search "cut and paste" and watch a video. Or both.

Inman News - sales rise, prices stable

2011-02-02T06:35:00.000-08:00

Real estate sales rebound in 2011, prices nearly flat
NAR forecast anticipates quicker recovery for new homes
By Inman News, Thursday, January 27, 2011.

Inman News™
In its latest real estate and economic forecast, the National Association of Realtors anticipates that sales of existing homes, after falling 4.8 percent in 2010, will rise 7.9 percent this year, to 5.3 million, and another 4.5 percent in 2012, to 5.53 million.
The median price of existing homes, meanwhile, rose 0.3 percent in 2010 after a 12.9 percent drop in 2009, and is expected to rise 0.5 percent this year, to $173,800, and another 2.4 percent in 2012, to $177,900.

Sales of new single-family homes are expected to rebound faster, rising 17.7 percent this year, to 374,000 sales, after a 15.5 percent drop in 2010, and then rising 51.1 percent in 2012, to 565,000 sales. In an earlier forecast, released last month, NAR anticipated that sales of new single-family homes would climb 20.8 percent in 2011 and 30.9 percent in 2012.

The new-home median price rose 2.2 percent in 2010 and is expected to climb 1.8 percent this year, to $224,700, and 1.9 percent in 2012, to $229,000.

NAR expects that 30-year-fixed mortgage rates will average 5.1 percent this year, up from 4.7 percent in 2010, and rise to 5.9 percent in 2012.

The group also forecasts the U.S. unemployment rate to fall from 9.7 percent in 2010 to 9.4 percent this year and 8.7 percent in 2012, while U.S. real gross domestic product is expected to dip from 2.8 percent in 2010 to 2.6 percent this year, rising to 3.2 percent in 2012.

Owning a home after foreclosure

2011-01-29T08:00:00.000-08:00

It won’t be easy to obtain a mortgage after foreclosure. But with enough time, discipline, and desire, you can own your own home again. Here’s what you need to do:

1. Stick with a job after foreclosure.Did you fall into foreclosure because of the lack of a steady job? If you did, the first step toward homeownership after foreclosure is finding and holding one. And if you already have one--stick with it, unless you can move to a better one. Note that potential lenders will require stable employment before they'll give you a new mortgage loan after a foreclosure. Even if it means taking a lower-paying job, it's worth it.

2. Rebuild your nest egg after foreclosure.Establish a safety net. Financial planners generally recommend three to six months of living expenses in a liquid account, but since you're coming out of foreclosure, six is a minimum to show stability and that you're able to pay your bills--including your mortgage--for an extended period if you lose your job.

3. Raise your credit score after foreclosure.This is the hardest and most time-consuming part. After foreclosure, your credit score, according to myFICO, probably dropped by about 150 points. You'll need to raise it back up with perseverance.

Pay bills on time and keep your credit card balances below maximum levels. The foreclosure will stay on your credit report for seven years, but if you prove your money management skills have matured, it will become less of a red mark as years go by. Tip: Consult a housing counselor. The U.S. Department of Housing and Urban Development offers free housing counseling for distressed homeowners with a foreclosure in their past. A counselor can help you with money management and budgeting. Counseling works--an evaluation of a program in Indianapolis discovered that credit scores greatly improved because of education and counseling, and increased average borrowing power by $4,500 per family.

Related Link: When Is Foreclosure Removed from Your Credit Report?

4. Reduce your waiting time for a mortgage after foreclosure.Normally, you would have to wait seven years after foreclosure before you can apply for a new mortgage under Fannie Mae rules. (Fannie Mae changes rules frequently. You can check the latest rules at Fannie Mae's site.)
However, you might wait only three years if you can show extenuating circumstances for your foreclosure, which are defined as "events that are beyond the borrower's control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations." These include:

Losing a job

Getting divorced

Having unexpected medical expenses

There's one last alternative if waiting isn't your thing--you can obtain seller financing, essentially bypassing the traditional mortgage. If both parties are amenable, you can enter into a lease with an option to buy, or take a mortgage directly from the seller. You'll most likely have to show some hefty reserve funds, but if you've turned around your financial situation quickly after your foreclosure, it's worth a shot to deal directly with the seller.

Keep in mind that sellers may be motivated to agree to this if they need to sell and the potential buyers they've met with can't obtain a conventional mortgage--perhaps because they've been through foreclosures, too.

5. Be honest about your foreclosure.When you're ready to apply for your new mortgage, don't try to hide your foreclosure. On the contrary, be proactive and reveal the steps you've taken to remedy the problems that led to your foreclosure.

Tip: Try a mortgage broker who can work with a variety of lenders to find you a loan. When you work directly with a retail lender, like a bank, they have a limited pool of loans to offer you. But a good mortgage broker--one with a vast network of lenders--has many options, and may be able to find a mortgage solution if the foreclosure in your past is creating challenges in obtaining one.

If you stay disciplined and positive, the American dream--obtaining a mortgage and owning a home of your own--can, indeed, be yours again. Even after foreclosure.

REALTOR® Code of Ethics

2011-01-25T08:30:00.000-08:00

I talk a lot about the REALTOR® Code of Ethics. I wanted to publish it here in all of its glory, for your reading pleasue and edification. Yes, The Code does give me shivers, not unlike the Constitution or The Bill of Rights.

Preamble:
Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. REALTORS® should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership. They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment. Such interests impose obligations beyond those of ordinary commerce. They impose grave social responsibility and a patriotic duty to which REALTORS® should dedicate themselves, and for which they should be diligent in preparing themselves.
REALTORS®, therefore, are zealous to maintain and improve the standards of their calling and share with their fellow REALTORS® a common responsibility for its integrity and honor.In recognition and appreciation of their obligations to clients, customers, the public, and each other, REALTORS® continuously strive to become and remain informed on issues affecting real estate and, as knowledgeable professionals, they willingly share the fruit of their experience and study with others.
They identify and take steps, through enforcement of this Code of Ethics and by assisting appropriate regulatory bodies, to eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession. REALTORS® having direct personal knowledge of conduct that may violate the Code of Ethics involving misappropriation of client or customer funds or property, willful discrimination, or fraud resulting in substantial economic harm, bring such matters to the attention of the appropriate Board or Association of REALTORS®.
Realizing that cooperation with other real estate professionals promotes the best interests of those who utilize their services, REALTORS® urge exclusive representation of clients; do not attempt to gain any unfair advantage over their competitors; and they refrain from making unsolicited comments about other practitioners.
In instances where their opinion is sought, or where REALTORS® believe that comment is necessary, their opinion is offered in an objective, professional manner, uninfluenced by any personal motivation or potential advantage or gain. The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations.
No inducement of profit and no instruction from clients ever can justify departure from this ideal.
In the interpretation of this obligation, REALTORS® can take no safer guide than that which has been handed down through the centuries, embodied in the Golden Rule, “Whatsoever ye would that others should do to you, do ye even so to them.” Accepting this standard as their own, REALTORS® pledge to observe its spirit in all of their activities whether conducted personally, through associates or others, or via technological means, and to conduct their business in accordance with the tenets set forth below.

Duties to Clients and Customers:

Article 1: When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly.

Standard of Practice 1-1:
REALTORS®, when acting as principals in a real estate transaction, remain obligated by the duties imposed by the Code of Ethics.

Standard of Practice 1-2:
The duties imposed by the Code of Ethics encompass all real estate-related activities and transactions whether conducted in person, electronically, or through any other means. The duties the Code of Ethics imposes are applicable whether REALTORS® are acting as agents or in legally recognized non-agency capacities except that any duty imposed exclusively on agents by law or regulation shall not be imposed by this Code of Ethics on REALTORS® acting in non-agency capacities.As used in this Code of Ethics, “client” means the person(s) or entity(ies) with whom a REALTOR® or a REALTOR®’s firm has an agency or legally recognized non-agency relationship; “customer” means a party to a real estate transaction who receives information, services, or benefits but has no contractual relationship with the REALTOR® or the REALTOR®’s firm; “prospect” means a purchaser, seller, tenant, or landlord who is not subject to a representation relationship with the REALTOR® or REALTOR®’s firm; “agent” means a real estate licensee (including brokers and sales associates) acting in an agency relationship as defined by state law or regulation; and “broker” means a real estate licensee (including brokers and sales associates) acting as an agent or in a legally recognized non-agency capacity.

Standard of Practice 1-3:
REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.

Standard of Practice 1-4:
REALTORS®, when seeking to become a buyer/tenant representative, shall not mislead buyers or tenants as to savings or other benefits that might be realized through use of the REALTOR®’s services.

Standard of Practice 1-5:
REALTORS® may represent the seller/landlord and buyer/tenant in the same transaction only after full disclosure to and with informed consent of both parties.

Standard of Practice 1-6:
REALTORS® shall submit offers and counter-offers objectively and as quickly as possible.

Standard of Practice 1-7:
When acting as listing brokers, REALTORS® shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. REALTORS® shall not be obligated to continue to market the property after an offer has been accepted by the seller/landlord. REALTORS® shall recommend that sellers/landlords obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre-existing purchase contract or lease.

Standard of Practice 1-8:
REALTORS® , acting as agents or brokers of buyers/tenants, shall submit to buyers/tenants all offers and counter-offers until acceptance but have no obligation to continue to show properties to their clients after an offer has been accepted unless otherwise agreed in writing. REALTORS®, acting as agents or brokers of buyers/tenants, shall recommend that buyers/tenants obtain the advice of legal counsel if there is a question as to whether a pre-existing contract has been terminated.

Standard of Practice 1-9:
The obligation of REALTORS® to preserve confidential information (as defined by state law) provided by their clients in the course of any agency relationship or non-agency relationship recognized by law continues after termination of agency relationships or any non-agency relationships recognized by law. REALTORS® shall not knowingly, during or following the termination of professional relationships with their clients:
reveal confidential information of clients; or
use confidential information of clients to the disadvantage of clients; or
use confidential information of clients for the REALTOR®’s advantage or the advantage of third parties unless:
clients consent after full disclosure; or
REALTORS® are required by court order; or
it is the intention of a client to commit a crime and the information is necessary to prevent the crime; or
it is necessary to defend a REALTOR® or the REALTOR®’s employees or associates against an accusation of wrongful conduct. Information concerning latent material defects is not considered confidential information under this Code of Ethics.

Standard of Practice 1-10:
REALTORS® shall, consistent with the terms and conditions of their real estate licensure and their property management agreement, competently manage the property of clients with due regard for the rights, safety and health of tenants and others lawfully on the premises.

Standard of Practice 1-11:
REALTORS® who are employed to maintain or manage a client’s property shall exercise due diligence and make reasonable efforts to protect it against reasonably foreseeable contingencies and losses.

Standard of Practice 1-12:
When entering into listing contracts, REALTORS® must advise sellers/landlords of:
the REALTOR®’s company policies regarding cooperation and the amount(s) of any compensation that will be offered to subagents, buyer/tenant agents, and/or brokers acting in legally recognized non-agency capacities;
the fact that buyer/tenant agents or brokers, even if compensated by listing brokers, or by sellers/landlords may represent the interests of buyers/tenants; and
any potential for listing brokers to act as disclosed dual agents, e.g. buyer/tenant agents.

Standard of Practice 1-13:
When entering into buyer/tenant agreements, REALTORS® must advise potential clients of:
the REALTOR®’s company policies regarding cooperation;
the amount of compensation to be paid by the client;
the potential for additional or offsetting compensation from other brokers, from the seller or landlord, or from other parties;
any potential for the buyer/tenant representative to act as a disclosed dual agent, e.g. listing broker, subagent, landlord’s agent, etc., and
the possibility that sellers or sellers' representatives may not treat the existence, terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties.

Standard of Practice 1-14:
Fees for preparing appraisals or other valuations shall not be contingent upon the amount of the appraisal or valuation.

Standard of Practice 1-15:
REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of offers on the property. Where disclosure is authorized, REALTORS® shall also disclose, if asked, whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker.

Article 2:
REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.

Standard of Practice 2-1:
REALTORS® shall only be obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in those areas required by their real estate licensing authority. Article 2 does not impose upon the REALTOR® the obligation of expertise in other professional or technical disciplines.

Standard of Practice 2-2
(Renumbered as Standard of Practice 1-12 1/98)
Standard of Practice 2-3
(Renumbered as Standard of Practice 1-13 1/98)

Standard of Practice 2-4
REALTORS® shall not be parties to the naming of a false consideration in any document, unless it be the naming of an obviously nominal consideration.

Standard of Practice 2-5:
Factors defined as “non-material” by law or regulation or which are expressly referenced in law or regulation as not being subject to disclosure are considered not “pertinent” for purposes of Article 2.

Article 3:
REALTORS® shall cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker.

Standard of Practice 3-1:
REALTORS®, acting as exclusive agents or brokers of sellers/ landlords, establish the terms and conditions of offers to cooperate. Unless expressly indicated in offers to cooperate, cooperating brokers may not assume that the offer of cooperation includes an offer of compensation. Terms of compensation, if any, shall be ascertained by cooperating brokers before beginning efforts to accept the offer of cooperation.

Standard of Practice 3-2:
To be effective, any change in compensation offered for cooperative services must be communicated to the other REALTOR® prior to the time that REALTOR® submits an offer to purchase/lease the property.

Standard of Practice 3-3:
Standard of Practice 3-2 does not preclude the listing broker and cooperating broker from entering into an agreement to change cooperative compensation.
REALTORS®, acting as listing brokers, have an affirmative obligation to disclose the existence of dual or variable rate commission arrangements (i.e., listings where one amount of commission is payable if the listing broker’s firm is the procuring cause of sale/lease and a different amount of commission is payable if the sale/lease results through the efforts of the seller/ landlord or a cooperating broker). The listing broker shall, as soon as practical, disclose the existence of such arrangements to potential cooperating brokers and shall, in response to inquiries from cooperating brokers, disclose the differential that would result in a cooperative transaction or in a sale/lease that results through the efforts of the seller/landlord. If the cooperating broker is a buyer/tenant representative, the buyer/tenant representative must disclose such information to their client before the client makes an offer to purchase or lease.

Standard of Practice 3-5:
It is the obligation of subagents to promptly disclose all pertinent facts to the principal’s agent prior to as well as after a purchase or lease agreement is executed.

Standard of Practice 3-6:
REALTORS® shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation.

Standard of Practice 3-7:
When seeking information from another REALTOR® concerning property under a management or listing agreement, REALTORS® shall disclose their REALTOR® status and whether their interest is personal or on behalf of a client and, if on behalf of a client, their relationship with the client.

Standard of Practice 3-8:
REALTORS® shall not misrepresent the availability of access to show or inspect a listed property.

Standard of Practice 3-9:
REALTORS® shall not provide access to listed property on terms other than those established by the owner or the listing broker.

Standard of Practice 3-10:
The duty to cooperate established in Article 3 relates to the obligation to share information on listed property, and to make property available to other brokers for showing to prospective purchasers/tenants when it is in the best interests of sellers/landlords.

Article 4:
REALTORS® shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner’s agent or broker. In selling property they own, or in which they have any interest, REALTORS® shall reveal their ownership or interest in writing to the purchaser or the purchaser’s representative.

Standard of Practice 4-1:
For the protection of all parties, the disclosures required by Article 4 shall be in writing and provided by REALTORS® prior to the signing of any contract.

Article 5:
REALTORS® shall not undertake to provide professional services concerning a property or its value where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties.

Article 6:
REALTORS® shall not accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent. When recommending real estate products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), REALTORS® shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the REALTOR® or REALTOR®’s firm may receive as a direct result of such recommendation.

Standard of Practice 6-1:
REALTORS® shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion.

Article 7:
In a transaction, REALTORS® shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the REALTOR®’s client or clients.

Article 8:
REALTORS® shall keep in a special account in an appropriate financial institution, separated from their own funds, monies coming into their possession in trust for other persons, such as escrows, trust funds, clients’ monies, and other like items.

Article 9:
REALTORS®, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and leases are in writing in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties. A copy of each agreement shall be furnished to each party to such agreements upon their signing or initialing.

Standard of Practice 9-1:
For the protection of all parties, REALTORS® shall use reasonable care to ensure that documents pertaining to the purchase, sale, or lease of real estate are kept current through the use of written extensions or amendments.

Standard of Practice 9-2:
When assisting or enabling a client or customer in establishing a contractual relationship (e.g., listing and representation agreements, purchase agreements, leases, etc.) electronically, REALTORS® shall make reasonable efforts to explain the nature and disclose the specific terms of the contractual relationship being established prior to it being agreed to by a contracting party.

Duties to the Public:

Article 10:
REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation. REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation. REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation.

Standard of Practice 10-1:
When involved in the sale or lease of a residence, REALTORS® shall not volunteer information regarding the racial, religious or ethnic composition of any neighborhood nor shall they engage in any activity which may result in panic selling, however, REALTORS® may provide other demographic information.

Standard of Practice 10-2:
When not involved in the sale or lease of a residence, REALTORS® may provide demographic information related to a property, transaction or professional assignment to a party if such demographic information is (a) deemed by the REALTOR® to be needed to assist with or complete, in a manner consistent with Article 10, a real estate transaction or professional assignment and (b) is obtained or derived from a recognized, reliable, independent, and impartial source. The source of such information and any additions, deletions, modifications, interpretations, or other changes shall be disclosed in reasonable detail.

Standard of Practice 10-3:
REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, national origin, or sexual orientation.

Standard of Practice 10-4:
As used in Article 10 “real estate employment practices” relates to employees and independent contractors providing real estate-related services and the administrative and clerical staff directly supporting those individuals.

Article 11:
The services which REALTORS® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, land brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate. REALTORS® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth.

Standard of Practice 11-1:
When REALTORS® prepare opinions of real property value or price, other than in pursuit of a listing or to assist a potential purchaser in formulating a purchase offer, such opinions shall include the following unless the party requesting the opinion requires a specific type of report or different data set:
identification of the subject property
date prepared
defined value or price
limiting conditions, including statements of purpose(s) and intended user(s)
any present or contemplated interest, including the possibility of representing the seller/landlord or buyers/tenants
basis for the opinion, including applicable market data
if the opinion is not an appraisal, a statement to that effect

Standard of Practice 11-2:
The obligations of the Code of Ethics in respect of real estate disciplines other than appraisal shall be interpreted and applied in accordance with the standards of competence and practice which clients and the public reasonably require to protect their rights and interests considering the complexity of the transaction, the availability of expert assistance, and, where the REALTOR® is an agent or subagent, the obligations of a fiduciary.

Standard of Practice 11-3:
When REALTORS® provide consultive services to clients which involve advice or counsel for a fee (not a commission), such advice shall be rendered in an objective manner and the fee shall not be contingent on the substance of the advice or counsel given. If brokerage or transaction services are to be provided in addition to consultive services, a separate compensation may be paid with prior agreement between the client and REALTOR®.

Standard of Practice 11-4:
The competency required by Article 11 relates to services contracted for between REALTORS® and their clients or customers; the duties expressly imposed by the Code of Ethics; and the duties imposed by law or regulation.

Article 12:
REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.

Standard of Practice 12-1:
REALTORS® may use the term “free” and similar terms in their advertising and in other representations provided that all terms governing availability of the offered product or service are clearly disclosed at the same time.

Standard of Practice 12-2:
REALTORS® may represent their services as “free” or without cost even if they expect to receive compensation from a source other than their client provided that the potential for the REALTOR® to obtain a benefit from a third party is clearly disclosed at the same time.

Standard of Practice 12-3:
The offering of premiums, prizes, merchandise discounts or other inducements to list, sell, purchase, or lease is not, in itself, unethical even if receipt of the benefit is contingent on listing, selling, purchasing, or leasing through the REALTOR® making the offer. However, REALTORS® must exercise care and candor in any such advertising or other public or private representations so that any party interested in receiving or otherwise benefiting from the REALTOR®’s offer will have clear, thorough, advance understanding of all the terms and conditions of the offer. The offering of any inducements to do business is subject to the limitations and restrictions of state law and the ethical obligations established by any applicable Standard of Practice.

Standard of Practice 12-4:
REALTORS® shall not offer for sale/lease or advertise property without authority. When acting as listing brokers or as subagents, REALTORS® shall not quote a price different from that agreed upon with the seller/landlord.

Standard of Practice 12-5:
REALTORS® shall not advertise nor permit any person employed by or affiliated with them to advertise real estate services or listed property in any medium (e.g., electronically, print, radio, television, etc.) without disclosing the name of that REALTOR®'s firm in a reasonable and readily apparent manner. This Standard of Practice acknowledges that disclosing the name of the firm may not be practical in electronic displays of limited information (e.g. "thumbnails", text messages, "tweets", etc.). Such displays are exempt from the disclosure requirement established in the Standard of Practice, but only when linked to a display that includes all required disclosures.

Standard of Practice 12-6:
REALTORS®, when advertising unlisted real property for sale/lease in which they have an ownership interest, shall disclose their status as both owners/landlords and as REALTORS® or real estate licensees.

Standard of Practice 12-7:
Only REALTORS® who participated in the transaction as the listing broker or cooperating broker (selling broker) may claim to have “sold” the property. Prior to closing, a cooperating broker may post a “sold” sign only with the consent of the listing broker.

Standard of Practice 12-8:
The obligation to present a true picture in representations to the public includes information presented, provided, or displayed on REALTORS®’ websites. REALTORS® shall use reasonable efforts to ensure that information on their websites is current. When it becomes apparent that information on a REALTOR®’s website is no longer current or accurate, REALTORS® shall promptly take corrective action.

Standard of Practice 12-9:
REALTOR® firm websites shall disclose the firm’s name and state(s) of licensure in a reasonable and readily apparent manner.Websites of REALTORS® and non-member licensees affiliated with a REALTOR® firm shall disclose the firm’s name and that REALTOR®’s or non-member licensee’s state(s) of licensure in a reasonable and readily apparent manner.

Standard of Practice 12-10:
REALTORS®’ obligation to present a true picture in their advertising and representations to the public includes the URLs and domain names they use, and prohibits REALTORS® from:
engaging in deceptive or unauthorized framing of real estate brokerage websites;
manipulating (e.g., presenting content developed by others) listing content in any way that produces a deceptive or misleading result; or
deceptively using metatags, keywords or other devices/methods to direct, drive, or divert Internet traffic, or to otherwise mislead consumers.

Standard of Practice 12-11:
REALTORS® intending to share or sell consumer information gathered via the Internet shall disclose that possibility in a reasonable and readily apparent manner.

Standard of Practice 12-12:
REALTORS® shall not:
use URLs or domain names that present less than a true picture, or
register URLs or domain names which, if used, would present less than a true picture.

Standard of Practice 12-13:
The obligation to present a true picture in advertising, marketing, and representations allows REALTORS® to use and display only professional designations, certifications, and other credentials to which they are legitimately entitled.

Article 13:
REALTORS® shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it.

Article 14:
If charged with unethical practice or asked to present evidence or to cooperate in any other way, in any professional standards proceeding or investigation, REALTORS® shall place all pertinent facts before the proper tribunals of the Member Board or affiliated institute, society, or council in which membership is held and shall take no action to disrupt or obstruct such processes.

Standard of Practice 14-1:
REALTORS® shall not be subject to disciplinary proceedings in more than one Board of REALTORS® or affiliated institute, society or council in which they hold membership with respect to alleged violations of the Code of Ethics relating to the same transaction or event.

Standard of Practice 14-2:
REALTORS® shall not make any unauthorized disclosure or dissemination of the allegations, findings, or decision developed in connection with an ethics hearing or appeal or in connection with an arbitration hearing or procedural review.

Standard of Practice 14-3:
REALTORS® shall not obstruct the Board’s investigative or professional standards proceedings by instituting or threatening to institute actions for libel, slander or defamation against any party to a professional standards proceeding or their witnesses based on the filing of an arbitration request, an ethics complaint, or testimony given before any tribunal.

Standard of Practice 14-4:
REALTORS® shall not intentionally impede the Board’s investigative or disciplinary proceedings by filing multiple ethics complaints based on the same event or transaction.

Duties to REALTORS®:

Article 15:
REALTORS® shall not knowingly or recklessly make false or misleading statements about competitors, their businesses, or their business practices.

Standard of Practice 15-1:
REALTORS® shall not knowingly or recklessly file false or unfounded ethics complaints.

Standard of Practice 15-2:
The obligation to refrain from making false or misleading statements about competitors, competitors’ businesses and competitors’ business practices includes the duty to not knowingly or recklessly publish, repeat, retransmit, or republish false or misleading statements made by others. This duty applies whether false or misleading statements are repeated in person, in writing, by technological means (e.g., the Internet), or by any other means.

Standard of Practice 15-3:
The obligation to refrain from making false or misleading statements about competitors, competitors’ businesses, and competitors’ business practices includes the duty to publish a clarification about or to remove statements made by others on electronic media the REALTOR® controls once the REALTOR® knows the statement is false or misleading.

Article 16:
REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients.

Standard of Practice 16-1:
Article 16 is not intended to prohibit aggressive or innovative business practices which are otherwise ethical and does not prohibit disagreements with other REALTORS® involving commission, fees, compensation or other forms of payment or expenses. (Adopted 1/93,

Standard of Practice 16-2:
Article 16 does not preclude REALTORS® from making general announcements to prospects describing their services and the terms of their availability even though some recipients may have entered into agency agreements or other exclusive relationships with another REALTOR®. A general telephone canvass, general mailing or distribution addressed to all prospects in a given geographical area or in a given profession, business, club, or organization, or other classification or group is deemed “general” for purposes of this standard. (Amended 1/04) Article 16 is intended to recognize as unethical two basic types of solicitations: First, telephone or personal solicitations of property owners who have been identified by a real estate sign, multiple listing compilation, or other information service as having exclusively listed their property with another REALTOR®, andSecond, mail or other forms of written solicitations of prospects whose properties are exclusively listed with another REALTOR® when such solicitations are not part of a general mailing but are directed specifically to property owners identified through compilations of current listings, “for sale” or “for rent” signs, or other sources of information required by Article 3 and Multiple Listing Service rules to be made available to other REALTORS® under offers of subagency or cooperation.

Standard of Practice 16-3:
Article 16 does not preclude REALTORS® from contacting the client of another broker for the purpose of offering to provide, or entering into a contract to provide, a different type of real estate service unrelated to the type of service currently being provided (e.g., property management as opposed to brokerage) or from offering the same type of service for property not subject to other brokers’ exclusive agreements. However, information received through a Multiple Listing Service or any other offer of cooperation may not be used to target clients of other REALTORS® to whom such offers to provide services may be made.

Standard of Practice 16-4:
REALTORS® shall not solicit a listing which is currently listed exclusively with another broker. However, if the listing broker, when asked by the REALTOR®, refuses to disclose the expiration date and nature of such listing; i.e., an exclusive right to sell, an exclusive agency, open listing, or other form of contractual agreement between the listing broker and the client, the REALTOR® may contact the owner to secure such information and may discuss the terms upon which the REALTOR® might take a future listing or, alternatively, may take a listing to become effective upon expiration of any existing exclusive listing.

Standard of Practice 16-5:
REALTORS® shall not solicit buyer/tenant agreements from buyers/ tenants who are subject to exclusive buyer/tenant agreements. However, if asked by a REALTOR®, the broker refuses to disclose the expiration date of the exclusive buyer/tenant agreement, the REALTOR® may contact the buyer/tenant to secure such information and may discuss the terms upon which the REALTOR® might enter into a future buyer/tenant agreement or, alternatively, may enter into a buyer/tenant agreement to become effective upon the expiration of any existing exclusive buyer/tenant agreement.

Standard of Practice 16-6:
When REALTORS® are contacted by the client of another REALTOR® regarding the creation of an exclusive relationship to provide the same type of service, and REALTORS® have not directly or indirectly initiated such discussions, they may discuss the terms upon which they might enter into a future agreement or, alternatively, may enter into an agreement which becomes effective upon expiration of any existing exclusive agreement.

Standard of Practice 16-7:
The fact that a prospect has retained a REALTOR® as an exclusive representative or exclusive broker in one or more past transactions does not preclude other REALTORS® from seeking such prospect’s future business.

Standard of Practice 16-8:
The fact that an exclusive agreement has been entered into with a REALTOR® shall not preclude or inhibit any other REALTOR® from entering into a similar agreement after the expiration of the prior agreement.

Standard of Practice 16-9:
REALTORS®, prior to entering into a representation agreement, have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service.

Standard of Practice 16-10:
REALTORS®, acting as buyer or tenant representatives or brokers, shall disclose that relationship to the seller/landlord’s representative or broker at first contact and shall provide written confirmation of that disclosure to the seller/landlord’s representative or broker not later than execution of a purchase agreement or lease.

Standard of Practice 16-11:
On unlisted property, REALTORS® acting as buyer/tenant representatives or brokers shall disclose that relationship to the seller/landlord at first contact for that buyer/tenant and shall provide written confirmation of such disclosure to the seller/landlord not later than execution of any purchase or lease agreement. REALTORS® shall make any request for anticipated compensation from the seller/ landlord at first contact.

Standard of Practice 16-12:
REALTORS®, acting as representatives or brokers of sellers/landlords or as subagents of listing brokers, shall disclose that relationship to buyers/tenants as soon as practicable and shall provide written confirmation of such disclosure to buyers/tenants not later than execution of any purchase or lease agreement.

Standard of Practice 16-13:
All dealings concerning property exclusively listed, or with buyer/tenants who are subject to an exclusive agreement shall be carried on with the client’s representative or broker, and not with the client, except with the consent of the client’s representative or broker or except where such dealings are initiated by the client.Before providing substantive services (such as writing a purchase offer or presenting a CMA) to prospects, REALTORS® shall ask prospects whether they are a party to any exclusive representation agreement. REALTORS® shall not knowingly provide substantive services concerning a prospective transaction to prospects who are parties to exclusive representation agreements, except with the consent of the prospects’ exclusive representatives or at the direction of prospects.

Standard of Practice 16-14:
REALTORS® are free to enter into contractual relationships or to negotiate with sellers/ landlords, buyers/tenants or others who are not subject to an exclusive agreement but shall not knowingly obligate them to pay more than one commission except with their informed consent.

Standard of Practice 16-15:
In cooperative transactions REALTORS® shall compensate cooperating REALTORS® (principal brokers) and shall not compensate nor offer to compensate, directly or indirectly, any of the sales licensees employed by or affiliated with other REALTORS® without the prior express knowledge and consent of the cooperating broker.

Standard of Practice 16-16:
REALTORS®, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation.

Standard of Practice 16-17:
REALTORS®, acting as subagents or as buyer/tenant representatives or brokers, shall not attempt to extend a listing broker’s offer of cooperation and/or compensation to other brokers without the consent of the listing broker.

Standard of Practice 16-18:
REALTORS® shall not use information obtained from listing brokers through offers to cooperate made through multiple listing services or through other offers of cooperation to refer listing brokers’ clients to other brokers or to create buyer/tenant relationships with listing brokers’ clients, unless such use is authorized by listing brokers.

Standard of Practice 16-19:
Signs giving notice of property for sale, rent, lease, or exchange shall not be placed on property without consent of the seller/landlord.

Standard of Practice 16-20:
REALTORS®, prior to or after their relationship with their current firm is terminated, shall not induce clients of their current firm to cancel exclusive contractual agreements between the client and that firm. This does not preclude REALTORS® (principals) from establishing agreements with their associated licensees governing assignability of exclusive agreements.

Article 17:
In the event of contractual disputes or specific non-contractual disputes as defined in Standard of Practice 17-4 between REALTORS® (principals) associated with different firms, arising out of their relationship as REALTORS®, the REALTORS® shall submit the dispute to arbitration in accordance with the regulations of their Board or Boards rather than litigate the matter. In the event clients of REALTORS® wish to arbitrate contractual disputes arising out of real estate transactions, REALTORS® shall arbitrate those disputes in accordance with the regulations of their Board, provided the clients agree to be bound by the decision. The obligation to participate in arbitration contemplated by this Article includes the obligation of REALTORS® (principals) to cause their firms to arbitrate and be bound by any award.

Standard of Practice 17-1:
The filing of litigation and refusal to withdraw from it by REALTORS® in an arbitrable matter constitutes a refusal to arbitrate.

Standard of Practice 17-2:
Article 17 does not require REALTORS® to arbitrate in those circumstances when all parties to the dispute advise the Board in writing that they choose not to arbitrate before the Board.

Standard of Practice 17-3:
REALTORS®, when acting solely as principals in a real estate transaction, are not obligated to arbitrate disputes with other REALTORS® absent a specific written agreement to the contrary.
Standard of Practice 17-4:
Specific non-contractual disputes that are subject to arbitration pursuant to Article 17 are:
Where a listing broker has compensated a cooperating broker and another cooperating broker subsequently claims to be the procuring cause of the sale or lease. In such cases the complainant may name the first cooperating broker as respondent and arbitration may proceed without the listing broker being named as a respondent. When arbitration occurs between two (or more) cooperating brokers and where the listing broker is not a party, the amount in dispute and the amount of any potential resulting award is limited to the amount paid to the respondent by the listing broker and any amount credited or paid to a party to the transaction at the direction of the respondent. Alternatively, if the complaint is brought against the listing broker, the listing broker may name the first cooperating broker as a third-party respondent. In either instance the decision of the hearing panel as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parties for compensation arising out of the underlying cooperative transaction.
Where a buyer or tenant representative is compensated by the seller or landlord, and not by the listing broker, and the listing broker, as a result, reduces the commission owed by the seller or landlord and, subsequent to such actions, another cooperating broker claims to be the procuring cause of sale or lease. In such cases the complainant may name the first cooperating broker as respondent and arbitration may proceed without the listing broker being named as a respondent. When arbitration occurs between two (or more) cooperating brokers and where the listing broker is not a party, the amount in dispute and the amount of any potential resulting award is limited to the amount paid to the respondent by the seller or landlord and any amount credited or paid to a party to the transaction at the direction of the respondent. Alternatively, if the complaint is brought against the listing broker, the listing broker may name the first cooperating broker as a third-party respondent. In either instance the decision of the hearing panel as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parties for compensation arising out of the underlying cooperative transaction.
Where a buyer or tenant representative is compensated by the buyer or tenant and, as a result, the listing broker reduces the commission owed by the seller or landlord and, subsequent to such actions, another cooperating broker claims to be the procuring cause of sale or lease. In such cases the complainant may name the first cooperating broker as respondent and arbitration may proceed without the listing broker being named as a respondent. Alternatively, if the complaint is brought against the listing broker, the listing broker may name the first cooperating broker as a third-party respondent. In either instance the decision of the hearing panel as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parties for compensation arising out of the underlying cooperative transaction.
Where two or more listing brokers claim entitlement to compensation pursuant to open listings with a seller or landlord who agrees to participate in arbitration (or who requests arbitration) and who agrees to be bound by the decision. In cases where one of the listing brokers has been compensated by the seller or landlord, the other listing broker, as complainant, may name the first listing broker as respondent and arbitration may proceed between the brokers.
Where a buyer or tenant representative is compensated by the seller or landlord, and not by the listing broker, and the listing broker, as a result, reduces the commission owed by the seller or landlord and, subsequent to such actions, claims to be the procuring cause of sale or lease. In such cases arbitration shall be between the listing broker and the buyer or tenant representative and the amount in dispute is limited to the amount of the reduction of commission to which the listing broker agreed.

Standard of Practice 17-5:
The obligation to arbitrate established in Article 17 includes disputes between REALTORS® (principals) in different states in instances where, absent an established inter–association arbitration agreement, the REALTOR® (principal) requesting arbitration agrees to submit to the jurisdiction of, travel to, participate in, and be bound by any resulting award rendered in arbitration conducted by the respondent(s) REALTOR®’s association, in instances where the respondent(s) REALTOR®’s association determines that an arbitrable issue exists.

2011-01-12T13:01:00.000-08:00

By Joe Stumpf
Some people are standing knee-deep in “should.”

For example, at one time I could make a list of over 100 things I was tolerating. The light in my closet was burned out and I had to move my ties into the light to see the colors. I was tolerating the burnt-out light bulb.

I had a gate latch that was broken, and when I closed the gate I would have to lean a brick up against the gate to make sure it closed. Every time I closed my gate, I would hear myself say, “I should fix that.”

My garage door would not close every time I hit the switch and I would say, “I should fix that…” The door in my downstairs bathroom was broken and when I had guests, they would get locked in the bathroom. And I would say, “I should fix that.”

I could give you over 100 examples, because that was one of the first exercises that Thomas gave me so I’d stop confusing tolerations with goals. If your life is filled with tolerations, you start to act like they are goals.

Let’s say you have a slow Internet connection and you say to yourself, “I should get a faster connection.” That is not a goal – that’s something you’re tolerating. Get a faster connection and the goal is to double your income in half the time.

When your life is filled with tolerations, you set small goals. When you live in a toleration-free zone, you set bigger, better goals.

Make a list of 100 things in your life that you’re tolerating and over the next 24 months see how many you can handle.

I promise you will set bigger, better goals.

2011-01-10T09:35:00.000-08:00

Mass. Court’s Ruling Could Be a Harbinger of More Foreclosure Hold Ups

January 7, 2011 by Brian Summerfield

By Brian Summerfield, Online Editor, REALTOR® Magazine

A decision this afternoon from the Massachusetts Supreme Court could have huge implications for future foreclosures. In a unanimous decision, the jurists rejected Wells Fargo and US Bancorp’s attempted seizure of two homes due to a lack of proper documentation.

Justice Robert Cordy said the “utter carelessness” in producing paperwork that would prove the banks owned the properties prompted the court’s ruling. Although the verdict only affects foreclosures in that state, it could influence the decisions of courts in several other states as they review similar cases. Additionally, attorneys general in all 50 states have previously expressed that they would look into whether financial institutions are erroneously foreclosing on home owners.

This ruling comes amid a recent spate of embarrassing, wrongful foreclosures and concerns about title complications caused by the Mortgage Electronic Registration Systems (MERS). We will bring you the latest developments in this story as they come in. Stay tuned!

2011-01-06T07:15:00.000-08:00

Housing Starts Predicted to Hit 3-Year High

Housing starts will probably reach a three-year high of 739,000 in 2011, creating about 500,000 jobs and helping trim the unemployment rate to 9.1 percent, said David Crowe, chief economist for the National Association of Home Builders, in an interview with Bloomberg.

“This is an ugly economic cycle,” he said. “We need job creation to get people comfortable with buying a home. If they do that, we’ll create jobs that will reinforce that home buying and fuel additional job growth.”

Job growth in other sectors, as well as population growth, will also likely have an effect. The number of U.S. households will rise 0.7 percent to 118.7 million in 2011, the largest annual gain since the beginning of the housing crisis in 2007.

Charles Lieberman, chief investment officer at Advisors Capital Management LLC in Hasbrouck Heights, N.J., expects jobs to rise by an average of 200,000 per month in 2011.

The CEO of luxury home builder Toll Brothers is optimistic. “The recovery is here to stay,” said Douglas Yearley. “I think 2011 will be an improving year, but I think 2012 will be a big year for us.”

Source: Bloomberg, Joshua Zumbrun and Kathleen M. Howley (12/28/2010)

2011-01-04T11:45:00.000-08:00

Battle of the Bank Buybacks - Part II
Published on Monday, December 6, 2010, 12:47 PM Last Update: 2 week(s) ago by Preston Howard

In one of my previous articles, I shared how the Federal mortgage alphabet soup entities (FHFA/FNMA/FHLMC/FHA) were starting to exercise the buyback/repurchase provisions which are built into their agreements with various banks, brokers, and “direct lenders” to recoup some of the massive losses associated with the loans they’ve purchased.

Now, the ante has been upped significantly because even though Bank of America has dug in its heels and retained the best counsel that money can buy to engage in “day-to-day, hand-to-hand combat” as described by their CEO, to fight each and every repurchase request, the Federal mortgage agencies and other mortgage pool investors are fighting back with their own army of super sleuths.

Former bank quality control officers, auditors and analysts across the country and in various business parks across the Bible belt are actively engaged in the “loan detective” industry. Scores of these former bank employees are literally pouring over thousands of pages of mortgage documents scouring for fraud, misrepresentations, and violations of bank underwriting policies in their attempt to give the Feds (and investors) the upper hand in their battle against financial institutions for the ownership of non-performing loan pools. Ironically, in many cases, the firms that function in the role of loan detective against the financial institutions were the same ones that performed quality control (QC) for the banks when the loan pools were first originated (a clear case of biting the hand that once fed you if I ever saw one).

As you can imagine, the stakes are quite high as bank losses from repurchases could exceed $90 billion. Given that the repurchase losses are related to a Non Interest Expense (NIE), the financial repercussions would go straight to the bank’s bottom line and onto the company’s stock price. Accordingly, the banks are vehemently fighting every last repurchase request. In many cases, because the banks have such deep pockets, and can pay for the services of the best attorneys, they can afford to drag out negotiations and lawsuits on repurchase requests. These stall tactics are quite effective, as in many instances repurchase requests do not lead to recoveries for the Feds and/or loan investors, as such, many of them choose not to pursue their legal remedies.

However, for those agencies and investors who are now willing and able to fight back, the reward can be huge. In many instances, the bank can be required to pay the difference between the original loan amount and the amount that the Fed/investors received through the process of foreclosure. Considering that many of these loans were underwritten based on values that were exorbitantly high, but foreclosed on at record lows, the spreads will be large, and so will the banks’ losses. With potential profits in the billions for uncovering fraud and other misrepresentations, loan detective agencies are in great demand right now, and the loan file “autopsies” are mounting.

For example, one former auditor turned loan detective has sifted through credit reports, title records, Google maps, and phone listings looking for the smallest pieces of evidence that a borrower lied to obtain a loan. This mortgage sleuth has uncovered investment properties that should have been primary residence loans, sales managers stating $250,000 in earnings that are actually $47,000, undisclosed properties that weren’t on the loan application, and other discrepancies to present a solid case for fraud. The firm that she works for has been successful in obtaining repurchases for 65% of its clientele, with recoveries in excess of $140 million. For some detective firms, a flat fee is earned; for others, a fee plus a percentage of the recovery is the reward. Accordingly, many detectives are extremely aggressive and hungry to find and substantiate mortgage fraud.

Therefore, depending on who you are and how you examine it, this twist in the buyback debacle can be a boon or a bust. As taxpayers, we are rooting for the Federal agencies to obtain buybacks as it translates into money flowing back into our Treasury’s pockets. This action also provides more liquidity for Fannie, Freddie and the FHA and we will not have to prop up and provide backstops for these agencies as initially thought. However, as users of mortgage capital, when the buybacks mount and the banks incur more losses, their appetite for risk decreases; subsequently, they are more likely to become disinterested in lending money on mortgages due to potential fraud and looming repurchases. This is further complicated by the fact that although Fannie/Freddie/FHA purchase and securitize the loans for sale in the secondary market, it is the banks, brokers, and direct lenders who are the institutions that originate them. To date, no one that I know has ever applied for a home loan directly with Fannie Mae (and the FHA doesn’t buy mortgages at all. It only guarantees the loans that the banks underwrite).

As such, when you sit back and consider how mortgages are currently originated and sold, either way we win and lose. If the Feds enforce more buybacks, banks incur greater losses; subsequently, they have less capital to deploy for new loans; and if loans are deployed by the banks, they are more expensive than they previously were (either through fees or rates). Conversely, if the banks win, the Feds eat the losses, and the only way to recoup the losses is through higher taxes. So in the end, I see yet another opportunity for reform!

Preston Howard is a mortgage broker and Principal of Rose City Realty, Inc. in Pasadena, CA. Specializing in various facets of real estate finance, he can be reached at howardpr@rosecityrealtyinc.com.

2011-01-03T08:47:00.000-08:00

The Federal Housing Finance Agency (FHFA) is starting to get really serious about all of the mortgage delinquencies which are taking place across the country.

For those of you who may have never heard of the FHFA before, it is the Federal entity which oversees and regulates the mortgage behemoths known as Fannie Mae (add acronym) and Freddie Mac. The tally for delinquent mortgages is rising by the millions and FHFA is looking to offload its losses onto the financial institutions that sold them to Fannie and Freddie. Now, they have enlisted the services of some high powered attorneys to assist with the process.

For example, FHFA recently retained the firm of Quinn Emanuel (QE) to jump start its investigations. Using its expertise in business and banking litigations, QE has already subpoenaed JP Morgan Chase and has put Bank of America on notice for $47 billion dollars in poorly serviced loans. This investigation is broad ranging, as the FHFA is not solely pursuing institutions that sold mortgages to Fannie Mae and Freddie Mac, but also private label financiers who eventually packaged and sold mortgage backed securities to investors on Wall Street. As it stands today, banks and mortgage companies could be forced to buyback over $179 billion in soured mortgage products. To date, Fannie and Freddie have forced banks to repurchase over $6 billion in mortgages, and an additional $16 billion will be forced back on the banks in the next 12 months. During the boom years of 2006 and 2007, Fannie/Freddie purchased over $200 billion in subprime loans, of which the majority have gone sour. The FHFA is seeking to force repurchases on these mortgages too.

As one could assume, the banks don´t want to buy back any mortgages. Accordingly, they are pushing back on FHFA/FHMLC/FNMA´s buyback requests with fervor. Bank of America´s chief has gone on record stating that "we will diligently fight this." Others have retained the best attorneys that money can buy to defend them tooth and nail. The unfortunate issue is that many of the buyback requests are legitimate. As a whole, the majority of these banks signed representations and warranties affirming that if any fraudulent documentation or faulty underwriting can be found in their files, the bank agrees to buy the loans back. Banks look forward to earning NII (net interest income) and not losing due to NIE (net interest expense). As repurchases mount, banks have to raise their loan loss provision, which accordingly drives down their stock price. This also leads to a need for additional capital. If the capital can´t be raised, a bank can fold.

Indeed, the scariest part is how buybacks travel through the mortgage food chain. Just as many banks signed repurchase agreements with representations and warranties regarding the buyback of loans with fraudulent documentation, mortgage brokers, bankers and other forms of �direct lenders´ signed them as well. Accordingly, if Bank of America, Chase, Wells, or Citi is forced to buyback mortgages, they may seek their own remedies by forcing buybacks onto mortgage brokers, banks and direct lenders who originated the loans. I haven´t personally experienced this myself, but I know mortgage brokers who were forced to buyback mortgages or go bankrupt. I don´t know many people with an average of $350,000 lying around (per loan) to reimburse a lender.

As this mortgage mess continues to snowball, I see the buyback issue getting bigger while sucking in more people involved in the mortgage origination process. Ultimately, it may take us years to recover as Fannie and Freddie struggle to repay the American taxpayer the $148 billion that was borrowed to keep both entities afloat by pushing bad loans back down on the banks that originated them in the first place. As the loss provisions rise and the stock prices fall, more banks will push their junk onto mortgage bankers, brokers, and other direct lenders by enforcing their own representations and warranties. The smallest of these guys will file BK, Fannie and Freddie will continue to be propped up on the back of the tax payer, while banks will suffer losses and in many cases closes their doors. Oh, what a mess one weaves when they originate a fraudulent loan in order to deceive!

By Howard Preston, contributor to Broker Agent Social.

Tax ramifications of a short sale

2010-12-27T08:25:00.000-08:00

This makes me crazy. A homeowner is in trouble, yet wants to do the right thing and attempt a short sale rather than just walk away. So what does the IRS do? Possibly count the amount forgiven as income. Aaaaargh! If the homowner just lets the lender foreclose then the IRS isn't interested. What is wrong with this picture?

by Dave Cherry - Dec. 26, 2010 06:10 PM
Question: My daughter executed a "short sale" of her home in 2010. What are the tax ramifications?
- Barry Davis, Apache Junction

Answer: In a "short sale," the IRS would most likely consider the difference between what the house sold for and what she owed on it as income to her in 2010. This applies when the lender forgives the debt entirely and gives up any further rights to collect it. In this case, the lender would most likely send her a 1099-C showing the difference as income, and your daughter could owe tax on it. Your daughter should check IRS form #982 to see if she qualifies for one of the many exemptions available. If she does qualify, the difference may not be considered income. Conversely, in a foreclosure the difference is most often not considered income to the homeowner.Read more: http://www.azcentral.com/arizonarepublic/business/articles/2010/12/26/20101226tax-cherry1227.html#ixzz19KWc6Xxo

Christmas musings, Christmas

2010-12-24T09:06:00.000-08:00

I sat down to write my usual “Christmas Cheer” Bits and Pieces. I quickly became suspicious that it was turning out to be a clone of my “Thanksgiving Blessings” piece last month.

I can’t do it. Let’s be honest – I’m not a big fan of Christmas. As a child growing up in an alcoholic/workaholic family, Christmas was always (at the very least) disappointing, and often it was just plain awful. One year I mounted a focused campaign for a bride doll. For some strange reason I wanted this doll that I had seen in the Sears catalog desperately. Yes, she showed up under the tree all right, with my sister’s name on her tag. Parents with too much to drink and a child asking for an anomaly of a gift led to a mistake. It has not been forgotten.

Then, on December 15th, when I was 19, a tragedy in my family happened. That event led directly to an even bigger tragedy on Christmas Eve. I’m not prepared to talk about the particulars, but there I was looking at the Christmas tree and listening to the Christmas Carols feeling my heart break and wishing that I could die, too.

Time marches on. I was a single Mom with 2 boys, frantically compensating for the fact that given a choice I would have just ignored the whole accursed thing. I would happily have gone to China or India, where I suspect they don’t sing many Christmas Carols. Since I couldn’t do that I went full-bore and rampant with the commercialism of Christmas. I spent way too much money on way too much stuff, pretending that I didn’t want to scream most of the time.

Fortunately I came out of the “Happy Holidays!” closet years ago and admitted to the world that I don’t like Christmas very much. I was amazed at how many like-minded people are out there. (I know a guy who became a Jehovah’s Witness solely to get away from Christmas.) Some people embraced me like a long-lost sister, while others look at me like I suddenly sprouted a leg out of the side of my head. “How can you hate Christmas? Why, there’s lights and Carols and poinsettias and gifts and unicorns and sparkleys and Santa Claus! Comfort and happy happy happy joy joy joy! What’s wrong with you, you horrible Grinchy Scrooge, you?”
That’s OK – as Popeye would say, I yam what I yam and I’m hard-wired to look at the weeks between Thanksgiving and New Year’s with narrowed eyes.

And now here we are, December 2010. I’ve gotten better – I don’t break out in hives anymore when I’m forced to be in the same place as a Christmas Carol. I don’t flinch (as much) when I suspect that I’m about to be inflicted with a Santa Claus.

I’ve found things about this season that I can get behind. I adore the concept of “Peace on Earth, Good Will Towards All” – that’s a good one. The lights are pretty. I’ve made peace with the tree. I like presents, and I give them because it’s fun to give and not because I have anything to prove. I like the feast and I love the family gathering. I like observing people that are actually enjoying this whole Yuletide thing, sort of the same way that I would watch an alien from another planet that I don’t really understand but find to be intriguing. I like to see that even the grouchiest among us try to be a little nicer, and I hope that this new attitude of theirs will last past December 25th. Hey, why stop now?

It occurs to me that I am not such an oddity in the global sense - most religions don’t much get into Jesus’ Birthday. So however you feel about the season and whatever your declared religion, find a place in your heart for some holiday spirit.

If you love the season, congratulations! I envy you. If you find it to be a chore, that’s OK. If you celebrate Hanukkah as opposed to Jesus’ Birthday, L’Chaim! If Kwanzaa is your thing, Umoha! If you celebrate the Hopi Soya Luna or the Winter Solstice, Cheers! The point is that whatever your personal reason for the season, remember the spirit of the season. Decide what matters most and keep it safely in the front of your mind.

I believe that the great leaders of all religions taught the same thing: Be nice. Be good. Do your best. Keep your priorities straight. Love another. Take care of the weak and feed the hungry. Do the right thing. We are all brothers and sisters, and what hurts one of us hurts all of us. Respect the Earth. At its best, Christmas embodies these concepts and gives us a season for embracing them.

Now, at THAT I can rejoice!

Happy Holidays!

total eclipse of the moon

2010-12-20T07:59:00.000-08:00

If rain, clouds or fog don't obscure the midnight sky Monday night, a dramatic total eclipse of the moon will be well worth staying up late to watch - in the Bay Area and across the nation.
Lunar eclipses are by no means uncommon, but during this one the moon will be high in the sky, so it should be easily observable from everywhere, said Andrew Fraknoi, chairman of astronomy at Foothill College in Los Altos Hills.
"It's a really democratic event," he said, "because you don't need an expensive telescope or any other sophisticated equipment to enjoy the spectacle - just your eyes or, if you like, a pair of binoculars."
The moon is always full during an eclipse, and for astronomers, this one actually starts at 9:55 p.m. Monday, when the full moon enters the pale outer fringe of Earth's shadow, called the penumbra. The dimming, though, will be so faint it can't be observed by ordinary folk.
By 10:33 p.m., the moon's edge will move into the inner shadow of Earth, called the umbra, and during that time of partial eclipse, watchers will see Earth's shadow creeping slowly across the bright lunar surface. By looking closely, it's apparent that the edge of the shadow is actually curved, which to ancient Greek observers proved that Earth is indeed round.
At 11:41 p.m., the lunar eclipse will be total as the moon will have moved entirely inside the Earth's shadow. That sight can be spectacular: refraction of the sun's light by the Earth's atmosphere will color the moon's surface unpredictably, and during past eclipses it has appeared a deep bronze or blood red or even a dark yellow.
Totality ends at 12:53 a.m. Tuesday, and the last of the partial eclipse finishes at 2:01 a.m.
Two Bay Area institutions have announced public events for the eclipse.
The Chabot Space and Science Center in Oakland will be open from 9 p.m. to 2 a.m. for its Midnight Delight, rain or shine. If the sky is clear, visitors can watch the eclipse from the observatory's deck and through its major telescopes. A simulated eclipse will be shown in the Chabot planetarium, and astronomers will explain the event to visitors.
The Lawrence Hall of Science in Berkeley will be open from 8 p.m. to 2 a.m. and will also offer a planetarium show, telescope viewing and explanations by astronomers and veteran eclipse enthusiasts.
On the Internet
Helpful NASA video of the total lunar eclipse, along with animations and more information about the moon and the night sky, can be found at shadowandsubstance.com.
E-mail David Perlman at dperlman@sfchronicle.com. Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/12/18/BAJ31GSALU.DTL#ixzz18fT57LJH

AZ AG's Office sues B of A for loan fraud

2010-12-18T06:44:00.000-08:00

Arizona sues BofA for alleged mortgage fraud
by Catherine Reagor - Dec. 17, 2010 11:37 PMThe Arizona Republic
Arizona's attorney general filed a lawsuit Friday against Bank of America, accusing the state's largest mortgage lender of deceiving borrowers who were trying to obtain loan modifications to keep their homes.
Bank of America violated the state's consumer-fraud laws by not responding to many homeowners' requests for help, rejecting loan-modification applications without supplying sufficient reason and beginning foreclosure proceedings on homeowners at the same time those borrowers were starting loan modifications, according to the lawsuit filed in Maricopa County Superior Court.

"BofA is abusing borrowers systematically," Arizona Attorney General Terry Goddard said. "It showed a blatant disregard for people's rights and practiced blatantly deceptive procedures."

Goddard's lawsuit follows a one-year investigation into the loan servicing and foreclosures practices of the Charlotte, N.C.-based lender, Arizona's largest mortgage holder and servicer. In 2010, nearly 500 consumers filed complaints against the bank with the state attorney general.
Goddard said in one case, attorney general investigators were able to prove the fax number BofA employees were giving customers to send in loan-modification requests and documents was a dead line.

Nevada's attorney general filed a similar lawsuit against the bank on Friday.

Goddard's lawsuit alleges the bank violated a previous consent judgment with the attorney general over mortgage-fraud allegations against Countrywide. BofA bought Countrywide in summer 2009. Later that year, the lender reached agreements with several state attorneys general to modify subprime loans made by Countrywide and to fund consumer-fraud-prevention efforts.

Goddard is calling for BofA to pay $25,000 for each violation of the consent judgment and $10,000 for each violation of the Arizona Consumer Fraud Act. Goddard said it's too early to place a price on the suit or any settlement. He said his office negotiated with Bank of America this week to try to reach a settlement before filing the suit.

Bank of America on Friday described the filing of the lawsuits as hasty.

"We are disappointed that the suits were filed at this time, however, because we and other major servicers are currently engaged in multistate discussions to address foreclosure-related issues more comprehensively," said Dan Frahm, a senior vice president for the bank, through an e-mail statement.

"Bank of America has been a cooperative partner with the attorneys general, has worked with state leaders to evolve programs and resources to broaden assistance to distressed customers," he said. "And we are already under way with further improvements to our processes and programs for Bank of America customers."

The Arizona attorney general's lawsuit describes the experience of more than a dozen Bank of America borrowers. One is Jeff Adams, who filed a complaint earlier this year with the Attorney General's Office over BofA's handling of his loan modification. He requested a modification on the mortgage for his Scottsdale home early last year. By October 2009, he said BofA had lost his paperwork four times, but his loan application was finally approved.

Early this year, Adams received a foreclosure notice despite making his payments on time. He called BofA and said he was told to keep making his payments and ignore the foreclosure notice. In July, someone from Fannie Mae knocked at his door and told him to move out because the mortgage company had foreclosed on it. Adams was able to fight and have the foreclosure canceled because no one had bought his home through the foreclosure auction.

"I felt like I was housejacked," he said. "I am making my payments but am still afraid that another foreclosure notice might come in the mail or at my door."

Goddard's lawsuit, if successful, won't provide compensation for Adams or other BofA loan holders who believe they have been wronged. Goddard said any damages paid by the lender would go toward the state's fund to fight consumer fraud. The lawsuit, though, could help pave the way for Arizona homeowners to file civil lawsuits against BofA, Goddard said. A successful settlement or lawsuit would establish bad practices by BofA.

Goddard said anyone in Arizona who feels he or she was treated unfairly by Bank of America through a loan modification or foreclosure proceeding should contact the Attorney General's Office at www.azag.gov. The lawsuits against Bank of America are the latest sign that homeowners and regulators are getting increasingly impatient with the banking industry.

Many metro Phoenix homeowners trying to avoid foreclosure through federally backed loan modifications are frustrated and angry with lenders over the problems with the process. Borrowers accuse several of the nation's biggest lenders of being unresponsive, requesting the same paperwork multiple times and making mistakes on paperwork and foreclosure actions.
The prosecutors want lenders to standardize their practices to reduce the chances of improper foreclosures and create a fund to help homeowners who have been foreclosed on illegally.Read more: http://www.azcentral.com/arizonarepublic/news/articles/2010/12/17/20101217bofa-suit-mortgage-fraud.html#ixzz18TUUuePB

5 tips before you list your house

2010-12-16T14:13:00.000-08:00

It's resolution time, folks. Last week, we offered some immediate action items for those who want 2011 to be the year they become homeowners. By popular demand, this week it's sellers' turn! Whether you are simply trying to decide whether to sell your home next year, or it's been on the market before and you are trying to revamp your approach to get it sold next year, here are 5 things you can do during what's left of 2010 to position yourself for home selling success in 2011.

1. Reality check yourself . . . before you wreck yourself (and the sale of your home, that is). The age-old real estate advice to wanna-be sellers is to get real about pricing - and like my sweet Grandma's advice about always rinsing the cake batter out with cold water, never hot, the caution against overpricing is advice that will stand you in good stead. (And that cold water trick works, btw - rinsing with hot starts to cook the batter to the bowl! But I digress) Before you even get to pricing, though, first you should get real about what your goals really are. Why do you want or need to sell? And how badly - how important is it to you? What would it take to make selling make sense? If you even think you may want to sell your home next year, get clear on these items in your own head before you even talk to anyone outside of your household.

Your very next step is to look at your mortgage account statement online and find out what you owe, and find out what your payoff amount would be.

Get a reality-based idea of what your home is worth - by talking with several local real estate agents who have a strong, recent track record of succesfully selling homes in your area; these are the folks who'll have a strong idea of what recent sales are the most comparable to yours, and what a local buyer would agree to pay for your home, as well as what it might appraise at. If 3 agents give you one range, and one gives you a bizarrely higher number, be skeptical about the outlier; there are rare bad apples out there in the agent world who will tell you whatever it takes to get the listing. Get real and stay there - don't fall prey to the fallacy that your home is worth more than others, for no substantive reason beyond the fact that, well, it's yours.Then, move toward making a decision about whether selling actually makes sense for you. Whatever you do, don't let your mental GPS steer you anywhere near that fantasyland where all your plans for selling, moving, etc. rest on the hypothetical that you can get 25% more than your home's actual fair market value. That sort of magical thinking costs you and your agent the time, inconvenience and money it takes to try to conjure up a sale that just ain't gonna happen, and that doesn't even count the opportunity costs of other things you could be doing with those resources. If your home's current value is bizarrely less than you want or need to move on, consider a short sale and price it appropriately or consider staying put and sprucing up your home so it better suits your needs - but don't price it at your "wishful thinking" price and set yourself and your agent up for failure.

2. Figure out the lay of your local land. National blogs and media outlets offer all sorts of useful advice about whether, how and when to sell your home, but there's one thing that sort of advice cannot convey: what's going on in your local market. Ask questions and read blogs in your local market and start talking with the real estate brokers and agents from your area who are actively blogging, listing properties and answering questions. They can give you the hyperlocal essentials you need to knows. Sure, it's a buyer's market nationwide, on average. But if you live in Omaha, that may mean that homes sell at or near asking in 45 days or less; in Mesa, Arizona, your home could stay on the market 6 months and sell for 30% below asking. In my neck of the woods, it's not bizarre for homes to sell at 5 percent above asking, in two weeks - and that's still a buyer's market compared to the 20% above asking sales that were common in 2006. Every market is different, and you can neither know what to expect when you list your home for sale, nor implement smart strategies for getting your home sold without knowing what's going on in yours.

3. Tour nearby Open Houses. Your job, as the seller of your home, is to present a compelling package to buyers - compelling enough to make them sign away 30 years of their lives and the vast majority of their worldly possessions in exchange for your home (kinda ups the ante, doesn't it?). To do that, it helps to get inside the minds of your home's target buyers. And to do that, you need to think how they think and see what they see. Visiting the other homes your target buyers will also see online and/or in real life will give you a sense for how your home's price and condition will measure up to the competition. Go view other homes that are for sale in your area, making sure you see at least a few that fall into each of these categories: (a) properties in your neighborhood or similar neighborhoods, (b) homes in your home's general price range, all around town, and (c) homes that have similar numbers of bedrooms, bathrooms and square feet - no matter what the price. You'll likely end up seeing homes in a wide range when it comes to price and condition; know that your home, to sell, will need to beat these on one or both measures. Also, if you try to go to at least a few open houses, rather than just asking your agent to show them to you at your convenience, you'll also get a sense for what sort of buyer traffic you can expect from open houses, and you can even chat with those home's listing agents about local market dynamics and what factors they believe may help or hurt that particular listing.

4. Formulate a plan: in A-B-C order. Collaborate with your broker or agent to put an action plan in place. Make sure you address: list price, list date, showing arrangements and the property prep work (see #5, below) that your agent recommends you do prior to listing the place. To minimize the stress of a somewhat inevitably stressful experience (i.e., selling your home!), work with your agent on Plans B and C now, too! What is the average number of days a home stays on the market in your area before it sells (DOM)? (Hint: don't look at the ones that never sold, because you don't want to be part of that group!) Decide up front if your home sits on the market for X number of days with no offer, you'll lower the price to Y. Also cover alternative marketing plans/vehicles for your home, and even calendar when you might start to offer transactional incentives, like closing cost credits, interest rate buy-downs, throwing in personal property and even making reverse offers to buyers who have expressed an interest but can't seem to get off the fence. At some point along the timeline, include a pause where your agent can interview buyer's brokers who have shown your home to collect buyer feedback, so you can course correct your pricing, marketing or staging strategies accordingly.

5. Do your prep work - fix and pre-pack. If you are sure you're selling in 2011, and want to put your holiday vacay time to good use, make a list of all those little repairs you've been wanting to do forever, call up your neighborhood handyperson and get 'em done. Loose knobs and handles, double-hung windows that are painted shut, the frayed carpet on the steps, that broken bathroom tile - fixing those things can give your place just the patina and polish it'll take to compete with the ample, low-priced competition you'll have next year.It may be tough for non-distressed home sellers to compete with foreclosures and short sales on price. But one area where individual home sellers usually can best the competition is CONDITION! Your home can present to buyers in tip-top condition in a way that most foreclosures and short sales cannot. And this includes staging - most foreclosures will be shown vacant, and/or with the debris of the former owner's lives tragically littering the premises. Short sales are usually (but not always) a bit better, but are most often shown fully occupied, furnished and cluttered - just as the owners live in them, because of the distressed nature of the sale. As a non-distressed home's seller, it behooves you to ensure that your home's curb appeal is at it's best and that throughout the interior, the buyer is able to visualize the lovely life they can, scratch that, WILL live once they buy and move into your home. Depersonalizing and decluttering are essential to this staging effort; in fact, one wise Trulia Voices contributor tells her sellers to go ahead and start "pre-packing" - put most of the personal items that make your home yours in a box, like you're getting ready to move (which you are!) and leave your place in as close to model-home move-in condition as possible.
Carol Anne disagrees with this stance, saying that a "real" house sells better than a "model."

2010-12-13T09:53:00.000-08:00

Funny. My last post was also from Freddie Mac, saying that interest rates are going up.

5 Predictions for 2011:

Freddie Mac analysts point to five features that they believe will likely characterize the 2011 housing and mortgage markets:

1. Low mortgage rates. With Fed observers expecting the central bank to keep the federal funds rate at its current target range of 0 percent to 0.25 percent for most (or all) of 2011, relatively low mortgage rates will be a feature of the 2011 mortgage market. Thirty-year fixed-rate loans are likely to remain below 5 percent throughout the year, and initial rates of 5/1 hybrid adjustable-rate mortgages will likely remain below 4 percent in 2011.

2. Prices have hit bottom. House prices are likely to begin a gradual, but sustained recovery in the second half of 2011.

3. Housing will remain affordable. With affordability high, many first-time buyers will be attracted to the housing market in the New Year, likely translating into more home sales in 2011 than in 2010.

4. Refinances will dwindle. Many eligible borrowers have already refinanced and the federal Making Home Affordable refinance program is expiring on June 30. While fixed-rate loans are likely to remain low, they will move up gradually, making it even less likely that refinances will be attractive to most home owners.

5. Delinquency rates will decline. Based on the last several business cycles, the share of loans that are 90 or more days delinquent or in foreclosure proceedings — known as the "seriously delinquent rate" — generally crests within a year of the start of the recovery in payroll employment, and this economic recovery appears to fit within that pattern. Payrolls began to rise last January, and by the spring the seriously delinquent rate had begun to fall.Source: Freddie Mac (12/09/2010)

2010-12-11T06:20:00.000-08:00

Mortgage Rates Jump to 6-Month High

Mortgage rates rose for a fourth-straight week to reach a six-month high as yields on government bonds continue to rise.

The average interest on a 30-year fixed loan hit 4.61 percent, up from 4.46 percent a week ago, Freddie Mac reported.
Also, 15-year fixed loans averaged 3.96 percent, up from 3.81 percent last week; and rates for variable adjustable-rate mortgages floated higher as well.

Source: Los Angeles Times, E. Scott Reckard (12/10/10)

Home Buying checklist

2010-12-09T12:44:00.000-08:00

There are lots of purchases that are highly prone to impulse buying: shoes on sale, puppies at the pound, and carrot cupcakes with cream cheese buttercream frosting come instantly to mind. (But that's just me.)

But houses? Not so much. Savvy, regret-free homebuying can take weeks or months of financial and lifestyle research and planning. If you want 2011 to be the year you become a homeowner, here are 5 things you should be doing, as we speak.

1. Minimize your holiday spending and save your cash. Instead of using the holiday sales to acquire a new winter wardrobe of cashmere sweaters, hold the discretionary spending down so you can give yourself the gift of homeownership! If you are serious about buying a home next year, don't run up additional credit card debt on gifts this year. Instead, make homemade cards or write holiday letters this year for everyone except the kiddos. And even for the kids, consider scaling back on the stuff, spending more of your time with them than your money, and getting started now saving toward your home purchase. (I don't think too many folks would argue that a less materialistic holiday season would hurt anyone, at any age.) Kickstart your 2011 homebuying resolution by starting a "Home" savings account at an high-interest, online bank (the discipline-boosting goal is a bank that isn't super easy to transfer funds out of when you run low on cash), and set up an automatic deposit into it every payday. To get specific about your savings goal, if you're cash-flush, obviously a 20% down payment will get you top notch interest rates and provide you with the maximum ability to manage your monthly payments. If you're going to be more of a bootstrapping buyer, an FHA loan might be right up your alley - they offer a down payment of 3.5% of the purchase price. All buyers should plan to have at least 3 percent of the purchase price saved up for closing costs, even if you want the seller to chip in. The lower-priced the home you want to buy, the more percentage points you should be willing to chip in for closing costs. It's easy for closing costs on an $150,000 FHA loan to run as high as $4,000 or more, considering transfer taxes, inspections, appraisals and mortgage insurance fees. So, even the scrappiest buyer should have a savings target somewhere around 6.5% of their target home's price. To buy a $200,000 home, for example, that would mean a savings target of $13,000. Local real estate and mortgage pros can help you clarify realistic "cash to close" expectations and savings targets for your area.

2. Research financing, areas homes, prices, agents and online. Smart homebuying takes a lot of research and knowledge-gathering. Since most buyers find it much harder to qualify for a mortgage than it is to find a home you'd love to live in, start with studying up on home financing and what it will take for you to get a home loan (note: FHA loans are preferred by the average homebuyer on today's market who has less than a 10% down payment, so start your research there). If you're considering relocating next year, now's the time to start narrowing down states, cities and even neighborhoods that may or may not work for you. Take into account the job market, housing and other costs of living, and income and property tax rates, as well as the critical lifestyle inputs that vary from state-to-state, like weather and whether the place is a personality fit for you and the life you want to live, be it urban sophisticate or outdoors adventurer. Also, start to develop a feel for home prices in a what-you-get-for-your-money type way, and start narrowing down the home styles and even neighborhoods that might fit your aesthetic preferences and lifestyle. If you're one of those rare buyers-to-be who is not already obsessively house hunting, hop on Trulia and start regularly checking out homes and neighborhoods, making sure to take advantage of the neighborhood ratings and reviews feature, which empowers you to surface what other folks think and say about an area.

3. Rehab your credit, if you need to. Go to AnnualCreditReport.com and check out your credit reports - from all 3 bureaus - for free. (Note - these will not give you your credit score for free - that costs extra, but it will give you the actual detailed credit reports.) Audit them for errors and do the work of disputing inaccuracies to have them corrected. Pay particular attention to: accounts that are not yours/you never opened, derogatory information that should have "aged off" your report by now (i.e., 7 years for late payments, 10 for bankruptcies) and balances or credit limits that are inaccurate (i.e., your credit card balance is listed at $2500, but you actually only owe $250.) These are the errors most likely to foul up your financing, so follow the instructions each bureau provides to correct them, stat. While you're at it, don't close any accounts, even if you are able to pay some down or off - actually, check out these tips for getting the bank to give you the best possible home loan, without unintentionally making your score worse!

4. Run your numbers. In the past, some overextended homeowners complained that they felt pushed into a mortgage they couldn't afford. Pundits blamed that on the real estate and mortgage industry, but I have witnessed firsthand many a homebuyer push themselves or their spouses into buying too expensive of a home. Eliminate this issue entirely by doing this - run your own numbers, before you ever even talk to a salesperson or start looking at homes beyond your means. (I assure you, once you see the million dollar home you think you can afford, the $250,000 home you can actually afford will be underwhelming.) Get your monthly finances in order, and get a clear read on how much your monthly bills are - outside of housing. Decide how much you can afford to spend every month for housing, when you buy your home. Get clear on exactly how much cash you plan to have at hand to put into your transaction up front. When, in the next step, you begin working with a mortgage broker, you'll want to share these numbers with them, early on in your conversation, to empower them to tell you what home price you can afford - not based on their rubrics, but based on what you say you want to spend every month and what you want to put down.

5. Talk to a real estate and mortgage broker (1 of each). Call or email MIke or Carol Anne. We will give you timely, thorough responses to your questions, and communicate in a language you understand. Drop us an email, letting us know you'd like to work on putting an action plan together for buying a home next year, and would like to talk with us about what action steps need to go on the list. Ask us to brief you on the timeline of a transaction in your local market, and to point out for you things like when along the process you'll need to bring money in, when you'll need to miss work and come into their office or the closing office, whether we offer conveniences like digital document signing, and generally the local standard practices about which buyers you'll need to know.

Depending on your target home purchase timeline, we might even want you to take a spin and look at a few properties to reality-check your expectations or narrow down a broad wish list. In addition to chatting about timing your purchase vis-à-vis your other life events and plans for the year, make sure to ask for referrals to a local, trustworthy mortgage broker or two - preferably one that has worked with them and closed a number of transactions with our clients. (In fact, many busy real estate pros will want you to talk with their trusty mortgage partner before they get too involved in your planning process. You may think you only need a month to get ready to buy, but once the mortgage folks weigh in, it might turn out that you actually need a few.) When you do get in touch with the mortgage maven, if you're serious about buying, you will want them to actually pull your credit report, check the actual FICO scores that come up on their system and give you their professional recommendations for what final tweaks you can do to your debts to get your credit score where it needs to be.

2010-12-06T16:05:00.000-08:00

Have you ever seen Australian Rules football? I don’t know why they include the word “Rules” in the name – as far as I can see there are no rules whatsoever. I love Australian Rules football. It’s a bunch of guys theoretically trying to get a football across the goal line, although usually they seem forget about the football entirely – they break often to have a fight. To my eyes, accustomed to civilized American football, it jut looks like one big brawl. There’s no padding, you don’t know who’s on which team, there’s lots of blood and cussing and sometimes they bite. It’s very different from what I’ve always been used to when it comes to football.

Representing a buyer on an REO or short sale reminds me a lot of Australian Rules football.

REOs, short sales, and auction properties comprise at least one quarter of the available residential properties on the market today. I was surprised at that number, 25%. I thought that it was higher – maybe 50 to 60%. I showed property the other day – out of the 7 properties, 2 of them were owned by “normal” people. The other 5 were foreclosures.

Knowing me as you do, you might be expecting a rant right about now. It’s not going to happen. I’m not going to rant, but I am going to ask us to adapt. If you or I (comfortable with how we’ve always done it here) decide to go to Australia and play football then we’d better learn how to play it in a different arena.

Like it or not, right or not, wrong or not, if we’re willingly going to The Land Of The Deal With The Bank then we’d better learn how their game works there. To come out of the first round of their game bitter and bloody and bitten, whining “They’re not playing fair!” is foolish, and is not representing our buyers. (Oh. “Bloody and bitten” comes from the bank’s asset managers, not our list agents.)

If we’re going to play on their field then we’re going to have to live with their rules or we don’t play. That’s how it is right now. Do I like it? It doesn’t matter. To spend our energy thrashing around instead of adapting to the new game and learning the new rules is a waste of time and is making neither progress nor money.

So what are the rules? That’s the problem. Each team (bank) makes their own rules. However, some trends seem to be in lockstep with all of the banks, so these I will take a stab at. I’m going to talk about REOs today. OMG! What the hell am I doing? I am going to get so nailed for this piece when all I’m trying to do is help. Oh, whatever. Nail away – I can take it.

Our time frames mean nothing to the bank. We can and should write “This offer must be responded to by Seller before next Tuesday the 7th at noon.” This way we have a valid offer with valid time frames. That’s all very nice, but the banks don’t care about our arbitrary time limits. (My favorite is when it takes the asset manager 3 weeks to respond and then demands a 7 day inspection period and a 10 day close. ~Snort.~) Warn your people that they shouldn’t expect a response quickly, and not to take it personally. The banks figure that when they finally respond to our offer we will either proceed (time for acceptance stipulations be damned) or we’ll go away. They don’t much care which one we do.

Now the back and forth of negotiating happens. Expect this negotiating to be verbals on the bank’s part. You will probably get emails or unsigned counter offers or phone calls from the list agent until you reach an agreement – then you’ll get the whole thing in writing in the form of the dreaded bank addendum.

Once you get the bank’s addendum, READ IT. Just as all REALTORS® are not the same, neither are all bank addendums. Some of them get grabby at the Buyer’s earnest money, some of them impose per diem penalties for delay in closing (no matter whose fault the delay is), some of them are just plain ludicrous. If we tell our Buyer to sign something without us thoroughly reading and understanding it first and then things get sticky over the language we’re going to look pretty stupid, and with good reason.

IMPORTANT THINGS TO UNDERSTAND ABOUT THE BANK’S PROCESS.
· The whole thing is totally unemotional on the bank and asset manager’s part. It’s business - pure dollars and cents. They can’t care that this was your childhood home, they can’t care that you love the house more than anything you’ve ever seen, they can’t care that this is your dream home. Show ‘em the money.
· The actual bank might never see your offer. The list agent uploads the pertinent info into the asset manager’s screen. The only thing that this asset manager sees is price, COE date, the amount of Seller concessions (Seller paid closing costs, Homeowner’s warranty, etc.) and the bottom line - what will the bank get when it’s all done? This asset manager can accept or kill a deal without ever consulting the bank. BTW – if the Buyer gets mad and calls the bank and says “Why didn’t you respond to my offer?” and the banker says “What offer?” it could mean that it was never presented, but it probably means that it died at the asset manager.
· Cash versus financing isn’t an issue.
· You will not get an asset manager or bank officer’s signature or a “REJECTED” or much of anything at all in response to your offer until and unless it is accepted. Acceptance is evidenced by the appearance of the Seller’s Addendum.
· If you end up in a competing offer situation and get a request for your Buyer’s “highest and best” it’s time to get serious. No more caginess, no more holding back. Get your Buyers to put on paper the highest price that they can stomach. The asset manager will choose which offer they want and either you win or you’re dead - Game Over.
· If your Buyers blew it at the highest and best stage they can still hang around as back-up. It’s the same story, though – you will not get a signature that puts you into iron-clad first back-up position. Hang and hope, that‘s what I say.

Title and escrow companies. Oh, what a bone of contention this is! Very simply, since the big banks are doing so many escrows they worked out a deal with their favorite title company for a volume discount. They used to like to insist that you use their title company or no deal. OK - cool, except that that’s a violation of RESPA and Fair Trade and Arizona State law. So now they say that they will pay the title company fees if you use their favorite. The Buyer is welcome to use any title company that they want, but in that case the Buyer will usually pay all title fees, both sides. Since Buyers think that all title companies are the same and they don’t want to pay all of the fees, we end up with a title and escrow in Far Away and a title officer that we don’t know, and who may or may not be competent.
You know what? Deal with it. Either your Buyer pays the fees (which they won’t want to do) or we work with the bank’s choice. Pick your battles – this is one that (in my opinion) is not worth the fight.

Once you get into escrow the battles that you and the list agent can (and have to) win will commence. The asset managers seem to all live together in a basement in New Jersey. They don’t understand easements or wells or septics or private roads and they don’t want to acknowledge our State mandated Affidavit of Disclosure. They also don’t want to understand that when they’ve accepted an offer that includes these items as a Seller’s expense they do have to deal with them. Instead, they want to throw up their hands and scream “As is! We won’t do it!” Or, “We don’t need any stinkin’ disclosure statements!”
The list agent goes head-to-head with them at this point and it’s usually fixed pretty quickly. If the list agent doesn’t win, tell them to tell the asset manager to consult with their legal department – that usually takes care of it. We might have to provide the statute for their legal department, since Arizona is so very different about a lot of these things.

Requirement for the Affidavit of Disclosure can be found at www.azleg.state.az.us/ars/33/00422.htm
Requirements for certification and transfer of septics (cost is negotiable in contract): www.azdeq.gov/environ/water/permits/download/septictank.pdf

Let’s talk about the agents who specialize in listing foreclosures. Most of them are doing their best to do a good job in a tough niche. REO list agents are bound by Article 1 of the Code just like everybody else – if the instruction from their client is lawful then they have to do what they’re told, so don’t shoot the messenger. That said, yes, I repeat, REO agents are just as bound by the Code of Ethics and Arizona law as anybody else. Just because the banks don’t want to follow the rules doesn’t mean that their agents are bullet-proof. Forgive them if they’re having an unmannerly moment – maybe you’re the 40th person to yell at them so far today and it’s only 10 AM. (No, it’s not ever OK, but if it’s just this once try to forget about it.)

I spent my Wednesday at another Association of REALTORS® sitting on a Professional Standards panel. The Respondent (the guy defending himself) is primarily an REO list agent. This whole process just bit him. The Complainant/Buyers did not believe that he had presented their offer on his listing, since there had never been much traditional-type response from the bank. We (the panel) knew that he had presented the offer because the bank issued a “highest and best.” The buyers dinked around and didn’t get the house and were mad. I wish that this list agent had kept all communication with the asset manager to email, and saved his “sent” emails. Even better, there is a little button at the top of my keyboard. It says “print screen.” I can’t get it to “print screen” (Maybe Mary knows how?) but if it does capture the image of what I’ve just done (like upload an offer) this will be an awesome CYA. If I was an REO agent I’d sure as heck learn how to make it work, I would email copies to everybody involved, and I would keep the “printed screen” in a file somewhere until the statute of limitations runs out.

Yes, List agents must disclose the existence of accepted offers by changing the status in MLS. When I call on an active listing and am told “We have an accepted offer, 2 back-ups, and 6 more in the wings but we’re leaving it active so that we can collect a few more,” I get mad.

List agents must also present all offers. Just because “it will confuse the bank and delay closing” is not an excuse to bag somebody’s offer. The only time that it’s permissible to sit on an offer is when you’ve got a letter from the Seller instructing you not to present anything after the property goes into escrow, and even then I’d let them know about it, anyway. (I am NOT talking about short sales. If during a short sale the Seller says “Don’t let the bank know about any other offers” that could be construed as mortgage fraud. I’m just saying.)

There you go. As a NON-REO agent, I did my best. You foreclosure list agents out there, thank you so much for consulting, and I look forward to your kind and constructive feed-back. If I got anything really wrong I will happily print a clarification next week, so let me know. It would be good if you start out with “thank you.”

Banks favor foreclosure

2010-12-04T09:29:00.000-08:00

Banks favor foreclosing over altering home loans
by Laurie Roberts, columnist - Dec. 4, 2010 12:00 AMThe Arizona Republic

Hannah Swearengin and I are walking around her cozy north-central Phoenix home on Thursday, and she is describing what it feels like to live there these days.
"Terrible stress, just terrible stress," she says. "I have, like everybody else, worked hard all my life. I raised and educated four children, one with special needs. I've never asked anybody for anything. I never thought at this time in my life that I'd be in this position, ever."
Swearengin is in good company. Close to 200,000 Arizona families are believed to be behind on their mortgages. By month's end, more than 50,000 will have lost their houses this year, as banks foreclose and sell them for a song.
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When that happens, the Swearengins of the world will be out and their neighbors will be left an empty eyesore, plus an average $22,000 hit to the value of their own homes, according to the Center for Responsible Lending. Meanwhile, the banks or whoever owns the loans will have bigger losses in many cases than if they had just worked with the struggling homeowner.
So what gives?
"I wish I knew," said Attorney General Terry Goddard, who is asking the Legislature to adopt a Borrower's Bill of Rights that would force banks to treat customers more fairly.
"They're hurting themselves. They're hurting their investors. They're hurting their credibility going forward, bottom line, by essentially trashing these assets. Every house that gets sold on the courthouse steps in this economy is a fraction of its value. All of us take a hit."
Swearengin, 68, has owned a home for most of her life and says she had never missed a payment until February. Her struggles began in late 2008 when she fractured her back and was unable to work, assuming she even could find work given that she's a Realtor in one of the nation's worst real-estate markets. For much of the past two years, she's lived on her savings, and the drain only increased in late 2009 when she was hospitalized with kidney failure.
By January, it became clear that she wouldn't be able to keep up with the $1,700 monthly payments on her $225,000 mortgage. So she called CitiMortgage, hoping to work something out, only to be told that she had to miss three payments before they could even talk about it.
She's now missed 11. She's faxed and re-faxed documentation of her situation. She calls every few days, never speaking to the same person twice. And still she waits to hear whether the bank will modify her mortgage. At one point, she says, the bank told her that it might be able to cut her payments in half by extending her loan to 40 years.
But since then, she's heard only silence, and her home is due to be auctioned off on Dec. 30.
CitiMortgage declined to discuss Swearengin's loan, citing privacy, but it offered a general comment. "The modification process involves submission of financial documentation, which must be updated and refreshed at certain points," wrote Mark Rodgers, CitiMortgage's director of public affairs. "If any required documentation is missing, the modification may not proceed. Variations in the borrower's financial circumstances, such as changes in income, also have a direct bearing on eligibility for permanent modifications. We are looking into this case and will work with the homeowner to explore potential solutions to avoid foreclosure."
This is, of course, what all the banks say, right up until the moment they foreclose and sell your place for a fraction of what it's worth.
In fact, the practice is so prevalent that this week, U.S. Acting Comptroller of the Currency John Walsh told the U.S. Senate Banking Committee that he's directing the big banks to suspend foreclosures for borrowers who are actively seeking loan modifications.
So who's responsible for putting people like Hannah Swearengin and Hazel Nitis - the cancer patient whom I wrote about earlier this week - out when it appears each could stay put if given a modification?
Banks blame the investors who own the loans.
But two of the biggest - Freddie Mac and Fannie Mae - pointed right back at the banks that service the loans, in testimony before Congress this week. "Servicers are required under our servicing contracts to help borrowers in trouble, not just collect payments," said Terence Edwards of Fannie Mae.
But a local real-estate attorney tells me that there's a financial incentive for the banks to foreclose rather than modify.
"At a foreclosure, they get all the fees, they get all the late charges. They get all their lost money off the top," said attorney Robert Nagle. "They don't want to reduce principal, because it's like your investment portfolio: They charge you 1 percent based on the amount they're managing. So if they start giving everyone reductions, their fees are going to be less because they're not managing as much."
Swearengin isn't even looking for a reduction of her principal, just an extension of her loan and perhaps a lower interest rate to bring her payments to a level she can afford.
The alternative is obvious. All you have to do is look at the foreclosed house next door. It's not hard to spot. It's the albatross at the end of the block, the weed-ridden mess surrounded by homes with neatly trimmed lawns ... for now.
Reach Roberts at laurie.roberts@arizonarepublic.com or 602-444-8635.Read more: http://www.azcentral.com/arizonarepublic/local/articles/2010/12/04/20101204bank-foreclosures-roberts.html#ixzz17AIR29bj

2010-11-26T08:47:00.000-08:00

At this very special time of the year
the most sacred time for our Ancestors
I send to each of you
my beloved family and friends
this Blessing
with words taken from ancient Celtic prayers.
During this time of turmoil in our world
I ask you to send with me
your thoughts and prayers for wisdom
peace
and sanity
to prevail
for all Nations
for all peoples
I am grateful to have each of you in my life
I send my love and prayers to you
at this time of Thanksgiving and Harvest Blessings
May your life be enriched, as you have enriched mine.

~Anacoana~

2010-11-24T07:45:00.000-08:00

I want to share my Thanksgiving email to the Sedona Verde Valley Association of REALTORS®. (Why should they get all of the fun?) While it's directed at real estate agents, anybody can enjoy it, so please do.

********************************************

Thanksgiving, yay! I love the idea of Thanksgiving. A day specially set aside to gather up our family and friends and loved ones and give thanks for our blessings and on top of that, eat a feast. How simple and elegant is that? My youngest son long ago designated Thanksgiving as his favorite holiday of the year. He says that it’s the purest of all days – no stress, no obligations, just the pure enjoyment of your loved ones, your blessings, and the feast.

I said this to a guy the other day. His response was along the lines of “Bah! What do I have to be thankful for? I’ve lost my investment properties, I filed bankruptcy this year, I had to accept a horrible loan mod on my house, I have 63 dollars in the bank and the bills are piling up, and if this next escrow doesn’t close I’m in big trouble! Thanksgiving, my…..derriere!”

Wow.

We all have stress. We’re all living in and trying to deal with this wretched economy. We all wish that the money situation throughout the whole world was better. However, I venture to guess that my son will pull out of his financial problems sooner than REALTOR® Scrooge because my son is focusing on his blessings, his “haves,” as opposed to his “don’t haves” and “used to haves.”

I learned a long time ago that when we notice a good thing it gets bigger. The problem is that when we obsess about a scary thing, it gets bigger, too. I’m not saying “Put on the rose colored glasses and be irresponsible - ignore the distress in our lives. Just pretend that it isn’t happening!” I am saying that the thing that we feed grows. The thing that gets our attention is the thing that thrives.

Can I give you an example? Let’s say that I have floor duty. Listen to this talk that I give myself while I’m drinking my coffee: “Oh, Boy. I am so freakin’ broke. I’m in deep doo-doo for sure! If things don’t turn around today I might as well just go put my head in the oven. I need a good escrow right now! Today! Yes! I will make somebody buy something! I will!” Or, let’s pretend that instead I think, “Wow. Great coffee! Look at that sunrise. Hi, bird! I am so lucky to live in a place that I can see this. I’m lucky to have eyes to see it with. Hey! Good job, God! You know, I hope that I can help somebody today. Those money problems? Whatever. I have faith that if I do the right thing it’ll all work out OK.” So when those buyers walk in, which attitude are they going to want to hang around and do business with? Who are they going to trust to take care of their best interests?

Is it really that simple? Yes, I think that it is. I do believe that good energy begets more good energy. I also believe that negativity attracts more negativity, and then we get even more negative and there you go – there’s a head in the oven.

Believe that happy thoughts bring happy things. What have we got to lose? Call me a crackpot and a Pollyanna if you will – I’m used to it. Whatever you choose to believe is up to you.

BUT…………let me give you another example of thoughts becoming reality. I have a shirt. I love this shirt – it fits perfectly, I adore the color, and whenever I wear it I feel good and get lots of compliments. You know what I’m talking about – we all have one of those shirts. Since I’m so attached to this shirt I take good care of it. If it falls off of the hanger it doesn’t lie crumpled up on the closet floor – it gets picked up and lovingly hung back where it belongs. This favorite shirt of mine has lasted for years, and it will still be around when I’m 60. I have another shirt that I don’t like one bit. It’s scratchy, it rubs the back of my neck, when I wear it makes my skin look green and it adds an easy 10 pounds. This one I let the children wear for dress-up and cooking and Easter-egg painting. When they’re done it gets tossed into the wash with the Levi’s, on hot. THIS shirt is obviously of shoddy workmanship and it has always been a waste of time and money because look – it’s stained and falling apart.

The thing is that these 2 shirts were almost identical. They’re the same brand and the same material - different colors and a little different pattern. I bought them on the same day. But since I value one and resent the other, my actions have made them into entirely different animals.

So what if the same principal is true of real estate or the people that we meet, or our careers, or buyers, or our listings? Take the paragraph about the shirts and substitute the idea of a spouse or a friend or a house or a client. The concept is the same, and so is the result. Negative thoughts and feelings can turn a simple thing into a pain in the neck that we’re glad to see go into the rag bag or the expired file. An attitude is all that it took to nurture one and ruin the other.

Some of you know that I volunteer for Trauma Intervention Programs. Not to add a downer, but I want to make an observation. I was at a home the other day to be with a woman whose husband had just committed suicide. The economy had gotten them. He left her a note that said that he had lost everything and so he was checking out. I hugged his wife who was inconsolable and crying her eyes out. I thought to myself that his priorities were skewed – he certainly had not lost everything. He just perceived that he had, and he forgot who and what are really important. He didn’t count his blessings.

I’ll start. My blessings are:

My family. I have a husband that is a saint, 2 wonderful sons, 4 amusing and adorable grandchildren, 2 daughters-in-law that complement the family beautifully, and in-laws that have accepted and welcomed me. I am blessed.

My health. Sure, it’s not perfect. Without medication my cholesterol goes astonishingly high. I need to go back on my diet and get back to the exercising. My eyes went south when I turned 40, and the readers are getting thicker and my arms seem to be getting shorter. My hair seems to have forgotten that it belongs on my head instead of moving to new and unfamiliar places. Gravity sucks, and that’s all OK. These are the worst of my complaints, and for that I am blessed.

My mind. As strange as my brain can be, I like it. It’s not schizophrenic or damaged (at least I don’t think that it is) and it usually operates pretty well. I am blessed with a working brain.

You guys. These past few years have been incredible. I am honored to have been part of your leadership team. I am amazed at the caliber of the people that I’ve gotten to work with – this includes staff, and the leadership ahead of me and those that are coming up, and you. I’ve learned, I’ve made friends, I’ve curled my lip a time or two. I grew mentally and emotionally. I’ve learned what I am capable of and I’ve learned restraint. I went to places that I would not have chosen for myself and absolutely loved. I have been blessed by you, my cohorts in SVVAR. Thank you.

My home, my neighborhood, my city, my community, my county, my state, my country. I love where I live. Even if we think that our elected politicians are idiots, we got to elect them and we get to say what we think about them. We are blessed.

Now - your turn. What are your blessings? I would love to hear about them.

Have a blessed Thanksgiving!

2010-11-23T10:50:00.000-08:00

Totally plagiarized from Mark Miskiel.

Hey all,

If you have a transaction in the queue or a potential transaction that is ready to come together, you may wish to mention this to your clients to PROTECT YOUR TRANSACTION.

As black Friday approaches and the Christmas shopping season starts, caution your clients to resist the store promotions where you open a new credit account and get a big discount at the register for doing so.

While it may be tempting to take advantage of the in store promotion, opening that account could potentially harm their credit score enough to preventing closing their mortgage loan or making their pre-qualification null and void.

Opening “New Credit” accounts can impact a borrower’s credit score up to 85 points because the credit bureaus take the following into the consideration.

Number of recently opened accounts
Proportion of newly opened accounts to all open accounts
Number of recent credit inquiries
Amount of time since the recent inquiries

It’s no news that mortgage lenders have been increasing the minimum credit score to obtain a mortgage. Also, there is a new requirement for the lenders to pull a “soft” credit inquiry right up to the point of funding the loan to ensure the borrowers credit profile has not changed. While the in store promotions may look great, the borrowers may want to carefully consider if accepting such a promotion is worth the risk of no longer qualifying for a mortgage.

I am here to help if you have questions about this or other lending topics.

Happy Holidays!

Mark A. Miskiel - Residential Lending Specialist
The Lending Company – Verde Valley
Office: (928) 634-7987 (rings to cell when out of office)
e-Fax: (480)-371-1150
www.Lender4you.com
NMLS # 198563
Not all loan officers are required to be licensed.
I am proud to be a licensed loan officer!

2010-11-20T07:32:00.000-08:00

An email from a good lender.

Hey all,

Mortgage rates have reached a 3 month peak. If you have fence sitters, it may be prudent to let them know what is going on as they should seriously consider purchasing that home they were thinking of.

According to Bankrate.com, the benchmark 30-year fixed rate mortgage averaged 4.62 percent. This is despite the government purchasing of Treasury Notes that was supposed to keep the rates low.

For the complete article, the link is below. You may need to copy and past the link into your browsers window to make it work.
http://www.bankrate.com/finance/mortgages/mortgage-rates-leap-to-3-month-peak.aspx

Have an outstanding weekend!

Mark A. Miskiel - Residential Lending Specialist
The Lending Company – Verde Valley
Office: (928) 634-7987 (rings to cell when out of office)
e-Fax: (480)-371-1150
www.Lender4you.com
NMLS # 198563
Not all loan officers are required to be licensed.
I am proud to be a licensed loan officer!

2010-11-19T13:35:00.000-08:00

Understand which mortgage loan is best for you so your budget is not stretched too thin.

2010-11-16T08:19:00.001-08:00

By: G. M. Filisko

The basics of mortgage financing:

The most important features of your mortgage loan are its term and interest rate. Mortgages typically come in 15-, 20-, 30- or 40-year lengths. The longer the term, the lower your monthly payment. However, the tradeoff for a lower payment is that the longer the life of your loan, the more interest you’ll pay.

Mortgage interest rates generally come in two flavors: fixed and adjustable. A fixed rate allows you to lock in your interest rate for the entire mortgage term. That’s attractive if you’re risk-averse, on a fixed income, or when interest rates are low.

The risks and rewards of ARMs:
An adjustable-rate mortgage does just what its name implies: Its interest rate adjusts at a future date listed in the loan documents. It moves up and down according to a particular financial market index, such as Treasury bills. A 3/1 ARM will have the same interest rate for three years and then adjust every year after that; likewise a 5/1 ARM remains unchanged until the five-year mark. Typically, ARMs include a cap on how much the interest rate can increase, such as 3% at each adjustment, or 5% over the life of the loan.

Why agree to such uncertainty? ARMs can be a good choice if you expect your income to grow significantly in the coming years. The interest rate on some—but not all—ARMs can even drop if the benchmark to which they’re tied also dips. ARMs also often offer a lower interest rate than fixed-rate mortgages during the first few years of the mortgage, which means big savings for you—even if there’s only a half-point difference.

But if rates go up, your ARM payment will jump dramatically, so before you choose an ARM, answer these questions:

How much can my monthly payments increase at each adjustment?
How soon and how often can increases occur?
Can I afford the maximum increase permitted?
Do I expect my income to increase or decrease?
Am I paying down my loan balance each month, or is it staying the same or even increasing?
Do I plan to own the home for longer than the initial low-interest-rate period, or do I plan to sell before the rate adjusts?
Will I have to pay a penalty if I refinance into a lower-rate mortgage or sell my house?
What’s my goal in buying this property? Am I considering a riskier mortgage to buy a more expensive house than I can realistically afford?
Consider a government-backed mortgage loan
If you’ve saved less than the ideal downpayment of 20%, or your credit score isn’t high enough for you to qualify for a fixed-rate or ARM with a conventional lender, consider a government-backed loan from the Federal Housing Administration or Department of Veterans Affairs.

FHA offers adjustable and fixed-rate loans at reduced interest rates and with as little as 3.5% down and VA offers no-money-down loans. FHA and VA also let you use cash gifts from family members.

Before you decide on any mortgage, remember that slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment. To determine how much your monthly payment will be with various terms and loan amounts, try REALTOR.com’s online mortgage calculators.

2010-11-15T16:38:00.000-08:00

It’s All About Perception. By Dan Polimino.

I speak with a lot of real estate agents on a daily basis and they all seem to be talking about how many deals are falling apart over inspection items.
If you are not familiar with what I am talking about, it is when a buyer puts a home under contract and then terminates the contract after the home inspection. The question is, why is this a growing trend now?

To answer that question, let’s take a look at two different time periods.
It’s 2005 and it’s a hot real estate market. Bill Smith has a home for sale and Tom Jones puts it under contract. Jones has an inspection done, items come up on the inspection, some minor and some more serious in nature. Jones doesn’t object to the inspection items, he doesn’t even bat an eyelash and moves on with the purchase of the home asking for nothing to be fixed.
Fast forward to 2010 and Bill Smith is selling his home, Tom Jones put it under contract and orders his inspection. Items come up on the inspection, some minor and some more serious in nature. Buyer and seller argue, haggle, and fight over who is going to fix what and how much. Jones is not happy and terminates the contract shortly thereafter.
What’s the difference between these two scenarios? What happened between 2005 and 2010? Did all of the homes in America all of a sudden fall into serious disrepair? I think not! The answer is, “It’s all about perception.” In 2005, buyers looked the other way on inspection items or thought “No problem, I’ll fix them myself.”
Buyers did not want anything to get in the way of them getting the home they wanted, not even inspection items. Today the buyer perception is, “I have the seller’s over a barrel, I am going get what I want, when I want it, and if I don’t win, I’ll take my money and go home or elsewhere.”
In most cases, deals should not be falling apart over inspection items. This can and should be a give-and-take compromise with both parties winning. I understand what the market is right now and buyers have an advantage, but I think that we can make even more progress in the recovery of the real estate market if we can get to a more equitable “perception.”
Dan Polimino is a Realtor with Fuller Sotheby’s International Realty.

NAR prohibits sexual orientation discrimination!

2010-11-12T11:00:00.000-08:00

NAR Bars Sexual Orientation Discrimination!
The change to Article 10 of the REALTORS® Code of Ethics passed in a roll-call vote by a greater than 9-to-1 margin.
It had been previously approved by the Professional Standards Committee and the Board of Directors at the 2010 Midyear Meetings in Washington D.C.
Here is the amended language of Article 10:
REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.
REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.
REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.
A related recommendation amending Standard of Practice 10-3 was approved as well:
REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.The amendment was discussed prior to the vote.
A few of the questions raised were:
1. Is "sexual orientation," without qualifiers or any further explanation, the right phrasing?
2. Is NAR denying private property rights (ostensibly, the right of property owners to refuse to do business with people of a certain sexual orientation due to their moral beliefs)?
3. Should NAR precede the federal government in adding sexual orientation as a protected class?
In response to the third question, a delegate from Minneapolis pointed out that the purpose of the Code of Ethics was to hold REALTORS® to a higher standard. Another delegate who approved of the amendment said the Code of Ethics was a living document. Delegates approved the Code change by voice vote, but one delegate called for a vote by ballot. In ballot voting weighted by size of local association, the amendment passed by more than 93 percent.
- Brian Summerfield, REALTOR® Magazine

2010-11-12T10:55:00.000-08:00

Mold Remediation: What to Expect When You Hire An Expert
By: Karin Beuerlein
Published: October 13, 2010
Mold remediation can be a pricey venture. Here’s what to look for and expect when you call in the professionals.
Who you gonna call?
Mold remediation is the Wild West of home improvement. The field largely is unregulated, and anybody can call himself an expert and call just about anything mold. There’s no required separation between who diagnoses the problem and who fixes it. And home inspectors, who evaluate your home’s major systems, don’t necessarily know much about mold remediation.When you need professional mold remediation, look for an independent consultant with credentials in mold remediation and investigation. Such professionals should:
Demonstrate completion of industry-approved coursework in mold investigation given by the American Board of Industrial Hygiene or the American Council for Accredited Certification (formerly the American Indoor Air Quality Council).
Provide a written report that includes lab results of air and surface samples.
Work independently from a mold remediation outfit.
Refrain from selling you products.
Investigate the mold
Mold remediation begins with an eyeball investigation that takes anywhere from 20 minutes to 2 hours, depending on where the problem is hiding--in plain sight or behind walls.Next, the consultant may suggest taking air and surface samples, necessary only to identify your particular mold for health or legal reasons. Always ask the mold remediation consultant why he wants to take samples: He should be able to articulate whatever hypothesis he is trying to confirm.
Make a mold removal plan
If cleanup is a simple DIY project, the consultant will advise you about procedures, protective equipment, and tools. He should also tell you where/what moisture problem gave birth to the spores. If cleanup is beyond amateur status, the consultant should draw up a mold remediation and removal plan that a professional mold remediation company or trusted demolition and building contractor will follow. Make sure the professionals you hire have a long track record, provide references, and are bonded and insured.Cleanup can be as simple as spraying and disinfecting drywall, or as complex as:
HVAC disinfection
Drywall, stud, and insulation removal
Cleaning personal belongings
HEPA (high-efficiency particulate air) filtration
How much it costs
Mold consultant: $250-$500 (which might include air and surface samples: always ask).
Air samples: $18-$225 apiece, depending on the laboratory.
Simple mold removal: $500 for surface mold removal.
Extensive mold remediation: $6,000-plus for severe infections that require extensive demolition, disinfection, and restoration.
Check your insurance
Homeowners insurance typically covers mold remediation and removal only if the problem results from a sudden emergency already covered under your policy, such as a burst pipe. Insurance usually doesn’t pay if the mold resulted from chronic moisture, deferred maintenance, or floodwaters (unless you carry flood insurance).As always, consult your insurance agent before contracting for work.Karin Beuerlein has covered home improvement and green living topics for HGTV.com, FineLiving.com, Better Homes & Gardens and the Chicago Tribune.

2010-11-11T06:55:00.000-08:00

Four years into the housing crisis, myths about foreclosure still litter the minds of even the smartest of real estate consumers. When it comes to matters as high stakes as your home, confusion can cost you thousands - or even your home. Whether you’re a buyer looking at foreclosures, a homeowner struggling to keep your home or a seller concerned making sure your home can compete with the foreclosed homes on your block, these foreclosure myths are prime for the busting, with no further ado.

Myth #1: Foreclosure happens fast. With unemployment and underemployment still affecting nearly 1 in every 4 Americans, no one is immune from fears that a pink slip might quickly turn into a foreclosure notice. According to NeighborWorks America, nearly 60 percent of families seeking foreclosure counseling cited a lost job or cut wages as the reason they were facing foreclosure. While the Obama Administration's Home Affordable Programs haven't been nearly as effective as predicted in actually preventing foreclosures, they have had the effect of extending the foreclosure process for many families. Even though the legal process of foreclosure can happen in as few as 6 months in most states, it is currently taking much longer for the average foreclosure to get to completion. Recently, JP Morgan Chase revealed that their average borrower who loses a home to foreclosure has not made any payments in 14 months nationwide; 22 months in FLorida and 26 months in New York.To be sure, some see this as a good, others view it as unnecessarily dragging out the overall market's recovery. Many insiders will point out that these delays in foreclosure may be calculated to save the banks the costs of owning and maintaining foreclosed homes, not to help homeowners. In any event, the fact that foreclosure does not happen nearly as fast, in many cases, as expected does give families who are temporarily down on their luck some extra time to try to get back on their feet and save their homes.

Myth #2: Buyers can’t get clear title or title insurance on foreclosed homes. When the foreclosure robo-signing scandal first hit, there was widespread concern that buyers would not be able to get clear title on foreclosed homes, because the former foreclosed owners might be able to come get their homes back when the improprieties in the bank's foreclosure documentation processes came fully to light. At the same time, several of the country's largest title insurance companies publicly balked at issuing policies on bank-owned homes until the issue was resolved. At this point, the banks claim they have revamped their processes, and all banks have stated that they have found not a single borrower whose home was repossessed without them having missed the requisite number of mortgage payments. Nevertheless, a number of governmental investigations are still in progress.The fact is, buyers of bank-owned properties in nearly every jurisdiction are protected from later title attacks by foreclosed homeowners by the bona fide purchaser rule, under which courts would prefer to simply award cash damages to be paid by the culpable bank to a wrongfully foreclosed-on homeowner, rather than reversing the sale or ownership to the new, innocent buyer. Additionally, the title insurers have now changed their tune and restarted issuing insurance policies on bank-owned homes which protect buyers' interests, after working with the banks for them to take responsibility in the event a former homeowner prevails in a wrongful foreclosure suit. While there are still many intricacies of title to be resolved for foreclosure buyers who purchase homes at trustee sales and auctions, or for cash buyers who often went without title insurance in the past, on the average, Trulia-listed, bank-owned property purchased with an average mortgage and title insurance, the chances a buyer's title will later be successfully challenged by the foreclosed homeowner on the basis of robo-signing? Exceedingly slim.

Myth #3: Buyers should wait for the shadow inventory to be released. Many a buyer, discouraged with the homes they see on the the form in their price range, has decided to sit still and wait for the banks to release for sale what is called their "shadow inventory" - rumored to be anywhere from 4 to nearly 6 million homes that have already been foreclosed, but not listed for sale, or will be foreclosed in the near future. The fact is, to the extent that the banks have acknowledged the existence of a pool of homes they own but are not selling, they have expressed that their reasoning for holding the homes off the market is to avoid flooding the market and driving home values down any further. For that reason, buyers should not expect to see a massive influx of these shadow homes onto the market anytime soon - if ever. The banks' current modus operandi is that as they sell a home, the replace it with another home in that market - if they sell 50 homes in a town that month, they'll put another 50 on the next. So, don't hold your breath waiting for a fabulous new flood of homes. Instead, set up a Trulia alert to notify you when homes that fit your search criteria come on the market, and be ready to call your agent and go visit any and every one that looks like it might be a good fit.

Myth #4: If you’re looking for a deal, you’re looking for a foreclosure. Despite what they may say, no buyer’s heart's fondest desire is to buy a foreclosure. But almost every buyer dreams of buying a great home - and getting a great deal on it. Many people think that to get a great value on their home on today's market, it means they must buy a foreclosure. As a result, the value and other advantages of buying an individually-owned home on today's market are frequently overlooked. Individual sellers with homes on the market right now are generally quite motivated, and understand that their homes are competing with discounted short sales and foreclosed homes. Many of these sellers are slashing prices in an effort to get them sold - the most recent Trulia Price Reduction Report revealed that 27 percent of homes on the market across the country have had at least one price reduction. Now that's what I call a sale!Further, individual owners are often much more negotiable on a wide range of contract terms than a bank which owns a foreclosed home. You can work with non-bank owners on things like repairs, closing dates, choice of escrow provider, closing costs and even included personal property much more flexibly than you can when the bank is on the other side of the bargaining table. On top of that, many individually-owned homes are in pristine, move-in condition; that is much rarer with foreclosures. So, don't underestimate the value of the deal you might be able to get on a non-foreclosed home. Just get clear on what you can afford and look at all the homes that are available in that price range, without discriminating against non-foreclosures.

Myth #5: Having a foreclosure on your credit history means it'll take years and years before you can buy again. One of the most Frequently Asked Questions in the Trulia Voices Community by homeowners who are facing or have just lost a home through foreclosure is how long it will take before they'll be able to buy again. Until recently, the standard wisdom was that 5 years, minimum, would have to have elapsed between the foreclosure and the new home purchase. Now, though, borrowers can obtain an FHA loan with the low, 3.5 minimum down payment requirement as soon as 3 years following a foreclosure. To do so, though, all your other ducks must be in a row. Post-foreclosure buyers need a credit score of 620-640 to qualify for an FHA loan; higher for a non-FHA loan - given that the foreclosure itself usually dings anywhere from 100-150 points off the credit score (not necessarily counting a full year or more of pre-foreclosure missed payments), former homeowners who want to buy again need to ensure they have no other late payments or credit dings after they lose thier home. You must have clean credit with no derogatory marks like late credit card payments following the foreclosure, and you may also be required to document 12 to 24 months straight of on-time rent payments after the foreclosure. Further, the bank may impose a lower debt-to-income ratio on post-foreclosure borrowers than on borrowers who have not had a foreclosure, in an effort to keep your mortgage payments low, keep you from overextending yourself and boost the chances you'll be a successful homeowner over the long-term this time around. The bank will also need to see 2 years of continuous employment history in the same field, and documentation that you meet other loan qualification requirements.

Thanks to Tara-Nicholle Nelson

2010-10-09T07:20:00.000-07:00

In response to recent queries about banks temporarily halting foreclosures to investigate improper procedures, NAR will be issuing the following item in Monday’s Washington Report.

Please keep in mind that banks are unilaterally doing this nationwide. There is no federal policy involved. Washington Report, Monday, October 11 In September and October 2010, several lenders suspended foreclosures in two dozen states due to questions about whether foreclosures were being processed consistent with applicable state law requirements. Concerns are being raised by state and federal elected officials, as well as consumer and fair housing groups, about the validity of ownership of mortgages that have been securitized and resold.

At the center of the controversy is Mortgage Electronic Registration Systems (MERS). This firm is responsible for electronically tracking the transfer of assignment of mortgages. Class-action suits are being brought against MERS alleging that the use of the system circumvents state laws. On October 1, 2010, Fannie Mae and Freddie Mac released statements regarding servicer compliance with foreclosure processing of Fannie and Freddie loans. In the releases, both organizations reiterated that servicers must comply with applicable state laws governing foreclosures.

Although nearly all of the foreclosures in question are expected to be fixed eventually, the current situation is creating difficulties and a new hurdle to the recovery of the housing and mortgage markets. NAR members are reporting that upcoming sales have been delayed indefinitely or cancelled, to the detriment of all involved. Additionally, homes on the market without clear title will make sales much more difficult. While banking executives focus their attention on this problem, it is possible that servicers may be somewhat more receptive to approving loan modifications and short sales, since they avoid the foreclosure procedural problems altogether. NAR has also developed the following talking points that can be used when responding to queries:

There’s no way of knowing what percentage of foreclosures that were improperly processed were, in fact, inappropriate or wrongly taken. The assumption is that for most of them, this may be only a technicality and that the property ultimately would have been repossessed.

For owners who believe their home was wrongly foreclosed, they may wish to contact a real estate attorney to investigate the possibility of a property claim. However, that could prove costly and time consuming – regulations vary by state.

For banks, it may make sense to modify loans or agree to short sales to expedite disposal of inventory.

For buyers, the assumption is that listed foreclosures come with clear property title but they should discuss any necessary contract contingency with their attorney. Foreclosures in limbo are likely to be withdrawn from the market.

It’s too early to tell if there’s an impact on the market but we will be monitoring the situation.

2010-09-28T14:15:00.000-07:00

10 Reasons to Buy a Home
Time magazine is being overly pessimistic in its recent cover piece that called into question the benefits of homeownership. In fact, now is a great time to buy. And what's more, tomorrow will be a great time to own, because the fundamental strength of homeownership hasn't changed. Why is now a great time to buy? Here are 10 reasons:

1. You can get a good deal. Prices are down 30 percent on average. They're at a level that makes sense for people's income.

2. Mortgages are cheap. At 4.3 percent on average for a 30-year fixed-rate mortgage, your costs to own are down by a fifth from two years ago.

3. You can save on taxes. When you add up the deductions for mortgage interest and others, the cost of owning can drop below renting for a comparable place.

4. It'll be yours. The one benefit to owning that never changes is that you can paint your walls orange if you want (generally speaking; there might be some community restrictions). How many landlords will let you do that?

5. You can get a better home. In some markets, it's simply the case that the nicest places are for-sale homes and condos.

6. It offers some inflation protection. Historically, appreciation over time outpaces inflation.

7. It's risk capital. If the economy picks up, you stand to benefit from that, even if you're goal is just to have a nice place to live.

8. It's forced savings. A part of your payment each month goes to equity.

9. There is a lot to choose from. There are some 4 million homes available today, about a year's supply. Now's the time to find something you like and get it.

10. Sooner or later the market will clear. The U.S. is expected to grow by another 100 million people in 40 years. They have to live somewhere. Demand will eventually outpace supply.

Source: Wall Street Journal, Brett Arends (9/16/10)

2010-09-25T09:05:00.000-07:00

Aaaaargh! This subject is rearing its ugly head again, the mythical 3.8% sales tax on all real estate sales. I'm re-posting the letter to the Verde Independent regaring this issue and my response to it.

8/7/2010 1:29:00 PMLetter: This bill is set to hurt the retiring generation
Editor:Under the new health care bill - did you know that all real estate transactions will be subject to a 3.8 percent sales tax? The bulk of these new taxes don’t kick in until 2013 (presumably after Obama’s re-election). You can thank Nancy, Harry and Barack and your local Democrat Congressman for this one. If you sell your $400,000 home, there will be a $15,200 tax. This bill is set to hurt the retiring generation who often downsize their homes. Is this Hope & Change great or what? Does this stuff make your November and 2012 vote more important?Oh, you weren’t aware this was in the Obamacare bill? Guess what, you aren’t alone. There are more than a few members of Congress that aren’t aware of it either (result of Clandestine midnight voting for huge bills they’ve never read). AND, there are a few other surprises lurking.
Lavone Turnipseed, Camp Verde

8/10/2010 10:57:00 AMLetter: This tired old rumor simply is not true.

Editor: I am compelled to respond to Lavone Turnipseed’s letter to the editor of Sunday, Aug. 8, entitled “This bill is set to hurt the retiring generation.”

Lavone repeats the tired old rumor that “under the new health care bill all real estate transactions will be subject to a 3.8-percent sales tax.” Happily, this is simply not true.

Can I give you some hard facts? The facts are that, yes, certain sales by high-income households will be affected by the new Medicare tax, possibly 1.5 percent of US households. (Not 1.5 percent of the US population - I said households.)

This tax applies only to people with an Adjusted Gross Income (AGI) of $200,000 for a single person or $250,000 for a couple.

The tax only kicks in after you take your capital gains exemption.

How about an example?

A couple with an AGI above the $250,000 limit sells their primary residence for $2 million. They make a $750,000 profit. Capital gains laws protect $500,000 of that $750,000, assuming that they have lived there for two out of the past five years. The 3.8-percent tax applies only to the $250,000 left over. Their tax liability under this new Medicare tax is $9,500. With all of the problems facing America right now, I’m not going to have a lot of heartburn over the fact that somebody in those income brackets profited $750,000 and had to give Medicare $9,500 of it.

Mr. Turnipseed, please don’t be embarrassed that you were fooled. Somebody made this up and then published it, and then somebody else repeated it and it has spread like wildfire throughout certain circles.

To read the Health Care bill, go to http://www.huffingtonpost.com/2009/07/15/house-health-care-bill-fu_n_234372.html

To verify my research, go to http://www.factcheck.org/2010/04/a-38-percent-sales-tax-on-your-home/

Or, http://www.snopes.com/politics/taxes/realestate.asp

Or, http://www.realtor.org/small_business_health_coverage.nsf/docfiles/government_affairs_myth_busters.pdf/$FILE/government_affairs_myth_busters.pdf

Carol Anne Warren
President, Sedona Verde Valley Association of REALTORS®

real estate scams

2010-09-02T14:11:00.000-07:00

Let’s talk about real estate scams. As homeowners get more broke and desperate the shysters get more innovative. Why do we, the REALTORS® need to know about the schemes out there?

· A bad guy’s preferred method of getting at our people is with our introduction. Yikes!
· When one of our clients gets in the middle of a situation that they have questions about we hope that their first move would be to call us for advice. Our first response has to be to advise them to call their lawyer. They’ll ask “Why?” and then we can explain what it was that raised up the hairs on the back of our necks.

Scam #1: This one ran rampant through our area a few years ago, with a particularly offensive twist. (I’ll tell you about the twist in a minute.) A guy combs through the foreclosure notices in the paper and then contacts the homeowners, telling them everything that they want to hear. This “rescuer” promises to save their homes and their credit. All that they have to do is quit-claim the property to him, because that will confuse the lender and delay the foreclosure. Of course, since it’s still really their house they should send him the payments and he will forward them onto the lender. Sometimes the “Rescuer” takes out a second mortgage on the house, sometimes he rents it out and sends the Sheriff to evict the former homeowners, sometimes he flips it if there’s enough equity. No matter what he does he makes out like a bandit and the homeowners end up with tears in their eyes, credit shot, and no home.
What happened here was even worse – the “Rescuer” was a REALTOR®. (He’s a former REALTOR® now.) He didn’t have to comb through foreclosure notices – he just searched MLS. He billed himself The Savior of The Distressed Homeowner and contacted the list agents and persuaded them that he was there to help. (Bring me your tired, your broke, your in foreclosure clients….) This was a while back, so at the time we didn’t have a lot of clues about how to help distressed clients – this “Rescuer” seemed to be Heaven sent since he had a plan and some answers. The list agents introduced him to their clients and gave him a 50% referral on their listing. He took up-front fees for part of his services, and placed liens on the properties for the rest of his fees and then he sat back and did absolutely nothing. He didn’t negotiate with the lenders, he didn’t return the increasingly frantic phone calls from the agents and clients, he just collected his referral fees and his lien payments if the property sold and said “Oh, well!” if the property foreclosed.
Our REALTOR® community talks to each other, so we figured out what was happening PDQ and somebody called their attorney and somebody else called the Attorney General’s Office and the “Rescuer” got stopped, but he did some damage in the meantime.

Scam #2: An unscrupulous lender advertises (usually on the internet in those annoying little pop-up boxes) that distressed homeowners can re-finance out of their money problems. If they still look good on paper he can get them a re-fi with all of the up-front costs rolled into the loan, plus a little cash in their pockets, plus a month or so with no payment. Since drowning people will grasp at any straw these lenders get lots of takers. People in financial trouble ended up with a new mortgage on their house that carried a payment higher than the one they couldn’t make in the first place and they started defaulting left and right. That was OK with these lenders – hey, they got their origination fee, right? This is why we should always recommend that our people use a local lender that we know from experience is honest and reputable.

Scam #3: A person (one of the pieces of this scam is that they have to use an overseas bank) contacts the list agent on a property. He explains that he saw the property on the internet and absolutely loves it and wants to buy it, cash, quick close. He refuses to use a title company – either he had bad luck with them or he pretends not to understand the concept, but he will use whatever attorney the agent recommends. He also doesn’t understand the concept of earnest money – he wants to offer a huge amount of earnest, if not the entire purchase price right now. (Nice hook, huh?) The agent ZipForms him the contract and he mails it back with this huge earnest money check (drawn on a foreign bank) to give to the lawyer to deposit.
Immediately something horrible happens in his life and he regretfully must withdraw from the contract, as is his right since he’s still in his inspection period. The attorney must wire him his earnest money right this minute!
The attorney does wire him the money back. A few days later the attorney finds out that the earnest money check that the buyer sent has bounced higher than a frog on a hot street. He has now wired funds (that are as good as gold) out of the country to cover a check that isn’t worth the paper it was written on. Oops!
A cute variation of this scam is that the deal is all agreed on and the earnest money is sent two or three or four times, separately. Then the buyer calls and says that his company made a mistake – wire the excess back to him immediately, please and thank you.
The secret to this one working is that the funds have to be wired back before we find out that the check(s) is no good, which is why an overseas bank is necessary. They want an attorney because title companies have systems and ways for verifying funds that they hope an attorney doesn’t.
Thanks to Joanne Holiday of Russ Lyon for the “heads up!” on this one.

Scam #4: A buyer looks at a property. He loves it, he wants it, he’s prepared to pay full price in cash. (Starting to sound familiar?) There’s only one tiny glitch: he has to close the escrow on his property in Florida to get the funds for this one. There’s only one tinier glitch: this property in Florida needs one final thing (survey, elevation study, skunk removal…..) that costs $75,000. There’s always a good story as to why he doesn’t have that $75,000. He proposes some creative financing: if the seller will front him the $75,000 he will be able to close the escrow in Florida and buy their property. Of course, when Florida closes they will be paid off, plus interest, plus the sale. They will get a first mortgage against this multi-million dollar property to secure their trust.
You go online to the Ogalalacoochee County records and see that yes, this buyer does own 20 acres there. You go on realtor.com and find a REALTOR® there and call him and find out that that 20 acres is a toxic waste dump that even the gators won’t go near. If you had gone along with this scheme the buyer would have been in the wind with the $75,000 and the seller would have eventually owned that worthless 20 acres.

Scam # 5: A person goes onto the internet and grabs some pictures of an expensive property. Then they go to Craig’s List (or wherever) and post the property for rent. They ask for a ridiculously reasonable monthly rent, plus first and last and cleaning, or whatever is legal in that state. A prospective tenant sends them the money, they execute a lease, and the tenant shows up at the house all ready to move in only to find that the actual owner of the property has never heard of the person that the tenant was dealing with.
This one has also happened with sales, but it’s a little trickier. The trick here is that (again) the seller refuses to use a title company.

Scam #6: Home repair, radon, snakes, mold remediation, ghost removal, siding, methane gas, bugs……..the list goes on and on. A guy knocks on the homeowner’s door, telling them about this great service that he’s offering. Either the price is incredible or he scares them with the horrible things that will happen to them and their family if they continue to live in this contaminated house, or both. This awesome deal is only available this second, and only if they pay at least half up front. The homeowner writes a check and the guy takes it straight to the bank and then leaves town, never to be seen again.
It seems obvious how to protect yourself from this one, doesn’t it? But, even if the homeowner insisted on the time that it takes to check out the guy with the Registrar of Contractors, often the real contractor whose name has been used has never heard of the guy. Same with the Better Business Bureau – it’s easy to get cards and invoices and truck magtnetics printed up with a contractor’s name on them.
Very simply, a good contractor will give them a bid that’s good for at least 30 days, and reputable contractors don’t tend to go knocking door-to-door trying to scare people.

Scam # 7: The buyer sees the property and loves it and wants it and is prepared to pay full price, cash. (Here we go again!) He goes to the seller and explains that he has a certain amount of cash, but the rest of the purchase price is in Euros or yen or peanut butter or gold and the exchange rate is killing him. He proposes to the seller that they make a deal at the amount of cash that he has in pocket and then he’ll give the seller the Euros or whatever under the table.
The seller likes this plan because he only has to pay commission and title fees and maybe taxes on the disclosed amount. Escrow closes, the seller signs the docs and the buyer hands over the goods. The seller goes to the bank or the money exchange or the gold merchant only to find that his goods are counterfeit and the buyer now owns the house for the disclosed amount.

Scam # 8: A former client informs their REALTOR® that they’ve discovered a disclosure issue with the property that they bought through that agent. If the REALTOR® will write a check to “make it good” then the former client won’t file a complaint with ADRE or AAR and won’t file a lawsuit. Give me a break!

As professionals, we can see the red flags in each of these scams. The scary thing is that my Mother-in-law might fall for any one of them. She lives in a kind and gentle world where people don’t do things like this to each other. Her world view is the reason that the elderly are these bastards’ favorite prey.

What are the red flags? The insistence on money up front, on nothing but pretty assurances. Urgency - action must be taken NOW. A deal that’s too good to be true. The feeling that maybe the good guys are finally going to get a break. A proposition that even in a perfect world would be too perfect. Unverifiable funds. The promise that everything will be OK – all they have to do is write one little check.

As a final chuckle, this came at the bottom of a scam email. This sort of tag line would also be a red flag.

PRIVATE: This is Not A Public Communication!This private email message, and any attachment(s) is covered by theElectronic Communications Privacy Act, 18 U.S.C. §§ 2510-2521, and is forthe sole use of the intended recipient and contains privileged and/orconfidential information! To all public servants, including but not limitedto Federal, State, or Local corporate government(s): I accept your oath ofoffice as your firm and binding contract between you and me, one of thePeople, whereby you have promised to serve, protect, and defend me,guarantee all of my unalienable rights, and defend the Constitution for theunited States of America! Any/all political, private, or public entities,International, Federal, State, or Local corporate government(s), privateInternational Organization(s), Municipality(ies), Corporate agent(s),informant(s), investigator(s) et. al., and/or third party(ies) working incollusion by monitoring My (this email) email(s), and any other means ofcommunication without My express written permission are barred from anyreview, use, disclosure, or distribution! With explicit reservation of allMy rights, without prejudice and without recourse to any of My rights! Anyomission does not constitute a waiver of any and/or all intellectualproperty rights or reserved rights! Notice to Principal is Notice to Agent! Notice to Agent is Notice to Principal!

Yep – that sure stopped me from forwarding it to the Attorney General’s Office.

borrower heads up part 2

2010-08-30T13:18:00.000-07:00

Lender panels re-cap, Part 2. Part one is further down the page.

Denise Dedrick of M & I Bank, 928.203.4484
Jim Hostler of Lender’s Direct, 928.225.7418
Mark Miskiel of The Lending Company, 928.634.7987
Shelly White-Collier of Northern Arizona Mortgage, 928.634.4251
Shelley Williams of People’s Mortgage, 928.821.0782 (Cell)

Let’s talk about credit, shall we? Our panels sure talked about it a lot, so we will, too.

“Credit is King.” That statement was repeated, well, repeatedly. Our panel members agreed that all of the other components of a loan don’t much matter if the borrowers have a remedial credit score. If it’s under 620 they’re going to have a problem.

Here are some of the very important points that were made about credit:

· It doesn’t matter how golden the Buyers are, it doesn’t matter if they have a credit score of over 800, it doesn’t matter that they have a big down payment, it doesn’t matter that their income to debt ratio is better then perfect – everybody gets put through the wringer. Everybody.
After they’re approved and gotten through the wringer DO NOT LET ANYTHING CHANGE! Advise your clients to wait until after close of escrow to buy the new furniture and washer/dryer. They should absolutely not spend any of the funds that were considered during the process, and they sure shouldn’t run up the credit cards. Bank balances could be checked at the last minute, a final credit check might be pulled. People have been denied because they got all excited and ran out and bought the materials for the new deck and now they’re denied.
Here’s a good one: There have been instances where that final last-minute credit check lowered the buyer’s credit score by the few points that it took to make them suddenly unable to qualify for the loan that they just got approved for. Doh! We can remind the lender to “refresh” the credit report as opposed to re-pulling it – a refresh doesn’t count as a hit.
The Buyer will be required to sign a 4506-T form, which authorizes the lender to get copies of their taxes straight from the IRS. The days are over when a Buyer could present the lender with “copies” of taxes that say exactly what the lender wants to see. After close, taxes may be pulled and re-pulled from the IRS and scrutinized and re-scrutinized. Why? So that the lender can see if maybe the borrower has amended the pack of lies that was actually filed with Uncle Sam in order to qualify for the loan. This happens a lot in the case of a default – the lender is looking for fraud so that they can make the originator buy back the loan.
If the Buyers want to shop around for a loan officer, that’s great. As they talk to Loan people, they should never authorize that their credit be run until they’ve settled on somebody. A bunch of inquiries hitting their credit could be enough to tip them out of an acceptable credit score and “Go buy a house!” into “Forget about it, Bub!”
If a disputed debt comes up on a buyer’s credit report it must be cleared up. “But it isn’t mine! That’s some other guy!” doesn’t cut it. The underwriter will insist that a dispute be cleaned up or removed because they want to know for sure that the Buyer won’t have to pay it, which would change the income-to-debt ratios.
Request that your lender pull a “soft” credit inquiry as opposed to a “hard” inquiry. Soft inquiries don’t impact credit – hard ones do. What’s the difference? I don’t know. That’s what they said – ask the lenders.
The initial credit check can be an alert to a borrower’s creditors, since they do keep track of inquiries. If they see a credit check from a mortgage company they sometime hurry up quick and report or re-report a bad debt that they might have actually given up on a long time ago. They figure that the debt has a good chance of getting paid off if somebody wants to buy a house.

We live in the information age. Encourage your Buyer to be absolutely up front and honest with their lender. If the lender knows about issues in the beginning they can figure out how to structure the deal and how to best advise everybody involved.

Believe that glitches and blips and cover-ups will be discovered. I trust our panel when they tell us that if there is fraud on the loan application or letters of explanation it will be caught, the loan denied and the Buyer possibly prosecuted. It’s just not worth it.

Some good questions came up at both of the meetings.

Q: Will the banks have to adjust their standards in the future to take into account what has happened to so many people lately, credit-wise?
A: They’re going to have to if they want to lend money. This is just common sense, but no concrete plans have been announced.

Q: Have Arizona’s non-recourse laws affected the number of foreclosures?
A: Non-recourse means that on the first mortgage on primary residences, the lender can take back the property in the case of default, but that’s about it – they can’t go after the borrower for any deficiency. Of course non-recourse has affected the thought processes of homeowners who are in trouble or upside-down. They’ve also put a big red flag on Arizona loan files.

Q: Are there really 3.75% 30-year fixed conventional loans available?
A: Yes, but to get that rate the borrower is going to have to pay some points. If they can live with 4% there are no points.

Q: Wow! Who is offering that?
A: We all have pretty much the same products available.
(Note from Carol Anne: I got emails from a lot of lenders who weren’t on the panel, saying that they do 203k rehab loans. Shelley Williams of People’s Mortgage does 203k rehabs, and Denise Dedrick of M&I says that they are getting set up to do them. This was cool because I thought that 203ks had gone the way of the dodo. Some lenders do FHA or Rural Housing or VA and others don’t. Jim Hostler does manufactured home loans and Mark Miskiel is all over USDA. It looks like what one guy won’t touch is the other one’s bread and butter. Ask your favorite lender – if they don’t deal with a program they know who does and they will be generous with that knowledge.)

Q: Are lenders bombarded with homeowners trying to take advantage of the low interest rates by refinancing?
A: No. You have to have equity to refinance and a lot of people don’t have the equity needed.

Q: What about these astonishing interest rates that I see advertised? Like, half a point?
A: That’s probably a “teaser” rate. It might go up after a certain amount of time, or costs are passed on to the borrower up front or it’s a bait-and-switch.

Q: I have an ARM (Adjustable Rate Mortgage) on my house that re-sets at the beginning of the year. When should I re-fi?
A: You might not want to. If it re-sets to 3.5% (which some of them are) your payment will go down.

Q: How hard is it to re-fi if I have enough equity?
A: The process is the same, whether for a new loan or a re-fi.

Q: What motivates you guys? It sounds like it’s as hard to be in the mortgage business as it is to be a REALTOR® right now.
A: We’re motivated by the same things that REALTORS® are - the satisfaction of doing a good job. We take these people personally, the same as REALTORS®. We care about the buyers and want to see them in a home. Denise Dedrick said, “The lenders do take it to heart when a deal falls apart. We work hard from pre-approval to processing to underwriting to closing to make it a smooth process for the REALTOR® and client. To say it stinks when a deal dies is an understatement.”

Q: Who is your favorite type of borrower? (I expected them all to say “Jumbos” but not one of them did.)
A: (in alphabetical order by last name)
· Denise Dedrick of M&I loves the challenge of a “different” loan.
· Jim Hostler of Lender’s Direct loves the self-employed and investors.
· Mark Miskiel of The Lending Company loves the coaching, helping people get ready to borrow.
· Shelly White-Collier of Northern Arizona Mortgage loves working with young couples.
· Shelley Williams of People’s Mortgage loves 1st time home buyers.

Q: What’s the secret? How do you guys get the loans approved after the internet lenders give up?
A: Online doesn’t have the human element. The guy dealing with borrowers that he’s never met just can’t care enough to be like a little terrier (That was Shelly White-Collier who said “We’re like little terriers.”) worrying at the details until it works. Our job is to make the buyers real to the underwriter. These borrowers have to be seen by the underwriter as Tom and Alice and their 2 kids and their dog, not file number such-and-such.

Q: How do you keep a borrower hanging in there while they jump through all of the hoops?
A: Keep reminding them that it will be worth it. Mark Miskiel said it well: “While loans are more difficult, we don’t want to scare off buyers. Prepare them for the increased paperwork and scrutiny but remind them that a buyer today is saving huge amounts of money both in the purchase price and historically low interest rates. Those savings are worth the extra work needed to purchase a home. If you broke it down to the amount of extra hours a buyer has to put into the transaction versus the savings that they’ll put in their pocket, it’s thousands of dollars an hour for the extra work. Not bad!”

Q: Is the market stabilizing?
A: Pretty much. There are still pockets where prices are going down, which forces the appraisers to label Arizona a “declining market.” This freaks out the Far Away lenders and underwriters.

Q: Are loan modifications working?
A: No. 60% of loan mods default, often because the so-called modification has a higher payment than the one that the borrowers couldn’t make in the first place. The result is that more home in the US are now owned by banks than by the public. Yikes!

And on that happy note, I wish y’all a good weekend. Holler if you have any questions!

2010-08-24T07:00:00.000-07:00

Every year, English teachers from across the country can submit their collections of actual analogies and metaphors found in high school essays. These excerpts are published each year to the amusement of teachers across the country.

Here are last year's winners:

1. Her face was a perfect oval, like a circle that had its two sides gently compressed by a Thigh Master.

2. His thoughts tumbled in his head, making and breaking alliances like underpants in a dryer without Cling Free.

3. He spoke with the wisdom that can only come from experience, like a guy who went blind because he looked at a solar eclipse without one of those boxes with a pinhole in it and now goes around the country speaking at high schools about the dangers of looking at a solar eclipse without one of those boxes with a pinhole in it.

4. She grew on him like she was a colony of E. Coli and he was room-temperature Canadian beef.

5. She had a deep, throaty, genuine laugh, like that sound a dog makes just before it throws up.

6. Her vocabulary was as bad as, like, whatever.

7. He was as tall as a six-foot, three-inch tree.

8. The revelation that his marriage of 30 years had disintegrated because of his wife's infidelity came as a rude shock, like a surcharge at a formerly surcharge-free ATM machine.

9. The little boat gently drifted across the pond exactly the way a bowling ball wouldn't.

10. McBride fell 12 stories, hitting the pavement like a Hefty bag filled with vegetable soup.

11. From the attic came an unearthly howl. The whole scene had an eerie, surreal quality, like when you're on vacation in another city and Jeopardy comes on at 7:00 p.m. instead of 7:30.

12. Her hair glistened in the rain like a nose hair after a sneeze.

13. The hailstones leaped from the pavement, just like maggots when you fry them in hot grease.

14. Long separated by cruel fate, the star-crossed lovers raced across the grassy field toward each other like two freight trains, one having left Cleveland at 6:36 p.m. traveling at 55 mph, the other from Topeka at 4:19 p.m. at a speed of 35 mph.

15. They lived in a typical suburban neighborhood with picket fences that resembled Nancy Kerrigan's teeth.

16. John and Mary had never met. They were like two hummingbirds who had also never met.

17. He fell for her like his heart was a mob informant and she was the East River.

18. Even in his last years, Granddad had a mind like a steel trap, only one that had been left out so long, it had rusted shut.

19. Shots rang out, as shots are wont to do.

20. The plan was simple, like my brother-in-law Phil. But unlike Phil, this plan just might work.

21. The young fighter had a hungry look, the kind you get from not eating for a while.

22. He was as lame as a duck. Not the metaphorical lame duck, either, but a real duck that was actually lame, maybe from stepping on a landmine or something.

23. The ballerina rose gracefully en pointe and extended one slender leg behind her, like a dog at a fire hydrant.

24. It was an American tradition, like fathers chasing kids around with power tools.

25. He was deeply in love. When she spoke, he thought he heard beeps, as if she were a garbage truck backing up.