NEW improved FHA Policy Changes:Tougher to get a FHA loan.

Here's the lowdown:

Mortgage Insurance Premium... which you may see as MIP is going from 1.75% to 2.25% ! I am of the understanding that this will go into affect in the spring.

Seller Concessions... FHA has allowed up to 6%... This will be reduced to 3%. This change could happen in the early summer.

Credit scores... Used to be the minimum credit score was 620... the change will be 580. If the score is above 580 the applicant may qualify for the 3.5% down payment. If the applicant's credit score is below 580 they will be required to put at least 10% down. This change may take place in early summer of 2010.

Those of you that have read my blog or know me personally know that I have had my own humble opinion of how mortgages in the past have been handled and even whom I felt should shoulder the blame. In my view the government's "involvement" and regulating, while well intended (remember our parents' generation expression? "The road to Hell is paved with good intentions!" ?) was the biggest contributing factor toward bad loans all across the fruited plain. Banks were encouraged/forced to extend credit to people that had no business buying a home on credit. I see here the advertisements and commercials: "No credit? No problem!" The government promoted home ownership as the "American Dream". And we, as a society, well how could we keep anyone from their dream?

I'm sorry... I'm getting a little off track here. The bottom line here is that the federal government is going to change the way FHA gives out mortgages. I suspect that in the short run it will be somewhat painful. I hope in the long run it will keep us from running into trouble again. But you know what? Our politicians will fix that!

Rock on my friends!

I MIGHT be talking to you....

This is a "stab in the dark". I am never real certain as to why people do or do not read a blog. But nevermind. You're reading this one so I'll get right to it.

Today I want to throw an invitation out to someone... maybe you... who knows?

The invitation is this: Call me and talk about a career in real estate.

Here's the deal. I'm not going to tell you it's easy. I'm not even going to call it fun. I'm here to tell you that it's a great profession that like anything else in life has it's pluses and minuses. But I am also here to tell you that you can make a pretty nice living being a Realtor. I'm also here to tell you that it does not happen over night. So if you're the kind of dreamer that wants to get their license and immediately start raking in the dough... well, don't bother calling me.

I'm on a new hunt. I want sincere enthusiasm. I want an agent that is going to be hurt, when they hear about a person who bought a house and had a horrible ordeal with their agent. I want people who don't like it when they hear detrimental things about their profession. I want agents who are going to take the job of representing clients seriously. I want agents who are looking at the big picture. I want people who are willing to work at improving our image. I want people with vocational pride.

And if you're lazy... and prone to taking the easy way out... and persuaded to cut corners... don't bother. And I think people who are like that really know they are like that. So be real honest with yourself. In fact I would ask you, if you are like that, to not only skip contacting me to help you get started, but to stay out of our profession all together. We don't need that.

If you want to make up your mind that you are going to treat it like a business... you are going to dedicate yourself to be the best you can possibly be... you are planning on putting in the time.... you are planning on making every day productive and gratifying, not only for you, but for your clients and everyone around you... then call me. I want to help you. I want to invest in you.

But just remember... this real estate business is not for everyone. And as far as the people who can't or shouldn't be in... it doesn't mean they are bad people... I just happen to know, it takes a few special attributes to do this and do it right.

Want to know more: email me a note: sstaples@realtyusa.com I'll shake it down straight for ya!

New Mortgage Rules... how does that affect YOU?

If you are taking the time to read a real estate blog you are, no doubt, aware there are many changes in the real estate business... more specifically in the financing end of it. One of the most notable is NO MORE PRE-APPROVAL LETTERS. Sort of.

Based on the new federal banking rules mortgage brokers cannot issue a pre-approval letter without also submitting a binding Good Faith Estimate. They may, however issue a pre-qualification without disclosing a new binding Good Faith Estimate to the borrower. No pre-qualification letter can have a property address without issuing a binding Good Faith Estimate. The word I am getting is that every single issue must be addressed before the bank can say. "pre-approved" or "approved".

So what does this mean to us Realtors and our buyers and sellers? Well, it may mean more time. It takes time to get all the information gathered. If you want to shorten the amount of time it will take, the professionals (read: Realtors) must be sure the seller has ALL their documents ready and completely up to date. Contracts must be tight. That means no changes and/or adjustments. If there are changes and/or adjustments they MUST be communicated to the originator and this will often mean a re-opening of the file and re-consideration of the factors previously reviewed.

I suspect that once the loan originators and lending institutions get further along with these changes things will settle down. Right now they are all very "uptight" about how to properly execute the loan documents. They have been spending hours in classes just to get up to speed, and I am hearing that they are being told that these regulations are extremely rigid and that I believe is causing a lot of anxiety!

So the bottom line is this... If you are a seller... have all your documents and pertinent information regarding your real estate in order and close at hand. If you are entertaining an offer be certain that the proper steps have been taken by your buyer and their lending company. If you are a buyer... ask your loan originator if they are completely familiar with the 2010 GFE/HUD Settlement Statement and the new RESPA regulations. And as always do NOT hold back any information or documents from your loan expert. That will only slow down the inevitable.

When this sort of change occurs in any industry, it is even more important to utilize the services of a professional that you know and can trust. If you don't know someone, I bet you know someone who does... call them!

Good luck! And don't forget... if you are going to take advantage of the new home buyer tax credit, you need to be under contract by April 30th!

Ever thought of signing a Buyer Agreement with an agent?

I suspect that most of you that might be reading this blog know that you can call just about any real estate office and ask the agent to show you a house(or houses) and they will.

Now, they might ask you some prying questions like... "Have you been pre-approved?" "Are you currently working with a real estate agent?".... And if you say yes to the first question and no to the second... well, you're probably off to the races. Races, indeed.

This is a somewhat cavalier and casual way to go about spending what could be the the most money you will ever spend in your life, don't you think? Depending on where you live, presumably hundreds of thousands of dollars.

Pretty serious stuff isn't it?

So what would happen if you called a Realtor and said this: "We are thinking about buying a house. And we would like to interview you to discuss what services you have to offer."?

I would hope that the next step would be an appointment at the Realtor's office to sit down and discuss the process. The discussion should include what you can expect from the agent and his/her firm. How long this relationship will last. What steps might be taken to terminate that agreement, if necessary. What the fee would be and how it would be paid. Also what this agent would be doing to find the suitable inventory. What type of agency relationship is this going to be? Most likely the firm will be a buyer's agent, but the agency will need to be discussed and disclosed.

The agent, I would hope, will explain the process and how his/her firm will support you with their resources and support staff. The agent, if they have enough experience will have a significant knowledge of the market and certainly will have available to them any and all professionals that might be needed to pull this project together.

So, my question is concerning having a written agreement. It has been my observation that clients who sign this type of agreement, transcend from a casual and cavalier relationship to a more structured and serious arrangement. With a more structured plan the client has confidence that their representative is looking after their account daily... scouring the market to find potential properties.

Give it some thought... if you are really serious about finding a house. Ask your Realtor if they will sign this agreement. If they don't or won't... does it make you wonder?

First time buyers! How about a two family?

You know, we are seeing quite a few young buyer-wannabes expressing some frustration. The banks are a little tougher on them. It really is harder to get approved for a mortgage these days.

So, some of the agents in my office were talking the other day and they are offering an alternative to these young first timers.... How about a two, or maybe three, or even four unit? You live in it, and collect rents from the other unit(s)! The banks will consider the potential rents as part of your qualifying... it will vary from institution to institution as to how much of the income can be projected to be used in your qualifying for a mortgage.

Now, you may notice I stopped at FOUR units here. That's because once you go to five or more units most banks will consider the property to be of a "commercial" nature and their loan packages vary significantly. They usually want a larger down payment (20 %)... they also may change the length of the loan and their right to call the note.... the interest rate may be subject to market indexes as well.

But think about this... You buy a house for say, 175K.... put 5% down... So you have a principal of $166,250.... At 5% rate you are looking at $892.47 principal and interest for your payment. Of course you will have to pay property taxes and insure the building... But think about how much you are paying in rent at your apartment right now.. $450?... $600?.... $800? If someone else is paying that to YOU... what's your net cost for living in the building you own... and the tax advantages you are getting... and the appreciation of the value building!


So you buy the building, live in it while you are building up equity and saving money for that single family home down the road....

Now this is a blog. It's not a detailed scenario that covers all the aspects... but it might be an idea that you may want to pass by your real estate agent!

Pretty good way to get started! Call your favorite agent today!

Home Buyers' Tax Credit

So... the Feds are saying this as of 10/29/09....

The plan might still change .

For now the details:
# Income eligibility for home buyers increases to $125,000 for individuals and $225,000 for couples.
# The tax credit for first-time home buyers (anyone who has not owned in the last 3 years) will be the lesser of $8,000 or 10% of the purchase price.
# For move-up buyers - "who have lived in their current home for at least five years" - the credit would be limited to $6,500.
# The credit runs from Dec. 1, 2009 to April 30, 2010, with an additional 60 day period to close escrow. (So end of April to sign contract, end of June to close escrow)

Now, more than ever !

Now more than ever you need to tighten up your position when you are selling your home. There is too much information out there. Yup! I said "too much". Now, you might be thinking that you can never get too much information. Maybe I should clarify here and say "too much UNRELIABLE information"...

Just the other morning I listened to this "real estate mogul" telling everyone houses were flying off the market! And quoting statistics that need a little more than just a quick quip or bumper sticker analysis.

What am I getting at? Now, more than ever, you need a professional to give you the true picture of what is happening in YOUR market. A phrase that is quickly getting old, but is true: "Real estate is local". And your real estate agent had better understand the local market! If you suspect he or she doesn't, it might be time to look for another professional. Someone who is paying attention, someone who has the resources, someone who you can trust to keep up on YOUR market.

Just because you read on some Internet site that a house like yours in Valley Falls is work $XXXXXXXXXX doesn't mean it really is. Heck, I went to one of those sites and checked out my own house and it was ridiculously overvalued by their analysis.... In fact that was what got me thinking about this blog. That and the talking head telling America what was going on in the real estate world as if it were all one community.

So, now, more than ever: Get together with a real estate professional that you know... that is serious about the business... that has pride in his/her profession. And listen to them. They know.