Archive for January, 2009

What kind of Realtors to Avoid

Finding a Realtor can be a difficult task. There are many to choose from and they all appear eager to help you. But how do you know which Realtor will best serve your interests best?

When considering the purchase of a home today, there are so many to choose from – but how do you narrow your choices to only 10 or fewer? It’s called the process of elimination, and it’s wise to use the same process to find the best Realtor.

Let’s take a look at how you can narrow your search for a Realtor by finding out what kind of Realtors to avoid.

1. Part-time Realtors – Part-time Realtors will guarantee part-time attention. They don’t work real estate most of the day and have limited availability. If you need answers right away, you will have to wait to get them. Part-time Realtors can hold up the real estate process for you; sometimes this could mean losing the buyer of your house or losing your dream home to someone else. On the other hand, a full-time Realtor can search homes for you, network your properties, preview homes for you and much more throughout the day. A full-time Realtor has the time to attend real estate classes and further/update his or her education to better serve clients’ needs.

2. Not actively involved with Real Estate – An agent’s number of years of experience in the Real Estate field do not have much to do with his or her involvement with the current real estate market. Some agents may have served decades in the real estate business but are busy with other work or hobbies and not sold any homes in the last year or longer. You should look for someone who is vigorously pursuing listings and buyers in a tough market or currently working on real estate deals. Such Realtors are aware of what’s really taking place in the current real estate market and of changes affecting the business.

3. Does not put your interests first – A great Realtor will always look out for your best interests, whether you’re buying or selling a home. Find a Realtor who has the time for you. Most discount Realtors deal with a lot of homes and will not give personal attention to you. Find out how many listings and buyers the Realtor has currently and how often the Realtor will communicate with you. Ask for references or testimonials from previous clients.

4. Agent or Realtor? – There is a distinction between agents and Realtors. A Realtor is a member of the National Association of Realtors (NAR), the state board and the local board. Realtors pay annual dues to all of these boards and are accountable to a high degree of ethical standards, while agents are not. Realtors benefit from continuing education, networking, and more as a result of their membership status.

5. Realtor and Mortgage Consultant All in One – Although it may seem convenient to have one person act as both Realtor and loan consultant at the same time, that can eliminate checks and balances between processing your loan and finding you a home. It opens a window for dishonest acts, which could result in the buyer not getting the best house or the best loan that could come with the home. A Realtor can review and question a mortgage consultant on any unnecessary fees or overcharges in the Good Faith Estimate (GFE) and the HUD settlement. A mortgage consultant also serving as your Realtor will very likely not be able to provide such an unbiased review.

When looking for a Realtor to assist you with the biggest investment of your life, find someone who works in real estate full-time, cares about you and is passionate about helping people. You know where to reach me when it’s time to buy or sell real estate.

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January 25, 2009 at 6:39 am Leave a comment

Tips on Getting a Good Deal on Your Loan

Many times when purchasing real estate, unless it’s a cash transaction, a borrower will require a loan officer to process a home loan through a lender. The loan officer or consultant gathers the needed information and presents the documents to the underwriter in order for the lender to fund the loan.

However, the over-hyped real estate market in 2005-2006 demonstrated that the mortgage industry is not well-regulated and therefore may be open to fraudulent transactions.

But how can you tell if someone is not giving you the best loan suitable for you or is overcharging you. As a Realtor, I want to see my clients get a great deal not only on the homes they purchase but also on the loans attached to those homes. Below are a few tips to get a great deal on your loan.

1. “You are shopping around” – There are thousands of loan officers connected with different lending institutions that would like to process your loan. Do not be afraid to tell them outright that “you are shopping around” for the best loan. Loan officers will become more competitive regarding their rates and charges if they know they have competition.

2. Ask for a GFE – “GFE” stands for Good Faith Estimate. Most loan officers will provide you with a GFE if asked. I respect loan officers who provide the borrower a GFE even if they are not asked. If you find a loan officer who tells you that he or she cannot give you a GFE until you’ve picked out a house, quickly say goodbye to that loan officer. Loan officers are not obliged to provide a GFE prior to a contract, but it is good customer service for borrowers to get one up front upon loan approval or when a loan status report (LSR) is secured. As a Realtor looking after my clients’ interests, I want the mortgage broker they select to be up-front about their charges and other fees. A GFE provides the borrower with itemized closing costs such as lending fees and estimated title fees. Lending fees are fixed but the title fees (unless named), taxes, insurance, and HOA fees are estimates that will be determined once a house is picked out. You may compare GFEs from different lenders to get the lowest lending fees. Lending fees vary from $600 to over $1,000.

3. Loan Origination Fee is Optional – Some loan officers will include a loan origination fee of 1% in the closing cost. Investopedia, an online dictionary for investors explains that an origination fee is similar to any commission-based payment. If a lender takes a 1% fee for originating a loan, they will make $1,000 on a $100,000 loan, or $2,000 on a $200,000 loan. The origination fee helps to reduce your rate. Loan officers cannot require you to include an origination fee in your loan. This is one way for loan officers to make money. Be wary if your loan officer persuades you to include an origination fee or does not ask you if you would like an origination fee. It is optional and is not necessary.

4. Other Fees – Be careful of lenders who may include other fees that are unnecessary. The following itemized charges are standard lending fees;
a. Underwriting Fee
b. Doc Preparation Fee
c. Processing Fee

Different lenders (banks or mortgage brokers) will charge other fees that may include; wire transfer fee, flood certification fee, courier fee, application fee and more. Also, the borrower is charged an appraisal fee up front. This fee maybe credited to the buyer at closing if the seller is paying for the buyer’s closing cost. You may compare TOTAL lending fees by mortgage companies to find out where you can get the most savings.

5. Closing costs to benefit YOU, not the lender or title company – I have seen some loan officers require substantial closing cost assistance from the seller so they can inflate their lending charges or charge an origination fee or charge the borrower a buy down rate, thereby increasing their commission. Be wary of loan officers who act in this manner. They are not acting in your best interest and should be let go immediately. As an added service to my clients, I review the GFE and the HUD statements to make sure that my client benefits from the closing cost calculations so that the money contributed by the seller is used to help save my client money on taxes, HOA or other future expenses.

6. Choosing the right lender – Different lenders specialize in certain loan products. If you are obtaining an FHA loan, get a loan officer who knows this product well. If you are using a government down payment assistance loan, get one that specializes in that area. If you are planning on borrowing money for repairs on top of your mortgage, get a loan officer who is an expert in a 203 streamline loan. Choosing the right lender is key to getting the transaction closed. Let me know which products you are interested in and I will be happy to recommend someone who may be the right lender for you.

When choosing a loan officer, it is important to find someone who: 1) Puts your interests first; 2) Provides great customer service and is easy to reach; 3) Is connected with a reputable lender; 4) Is honest and reliable; and 5) Is knowledgeable about the loan products you need.

January 21, 2009 at 1:14 pm 2 comments

Generous Home Buyer Incentives

Today’s real estate market offers amazing opportunities for home buyers. Interest rates are at historic lows and the prices of homes are incredibly discounted. On top of this great news, there are government programs that help qualified home buyers save a lot of money.

First-Time Home Buyers Incentives:

1. $7,500 first-time home buyer credit if you purchase a home by July 1, 2009. To find out more details about this incentive, visit http://www.MariaRealEstate.com and click on my blog.

2. Government down payment assistance up to $10,000 in Maricopa County and up to $20,000 in Pinal County for borrowers with credit score of 550 or better. Certain income limits apply and a home buyer class is required prior to funding.

Move-up or move-down home buyers:

Purchasing a government foreclosed homes provide borrowers with great incentives such as:
a. Seller to pay up to 3 percent of buyer’s closing costs
b. Seller to pay up to $5,500 in repair costs
c. $1,000 bonus if buyer offers full price for the home
d. Only $100 down payment on an FHA loan
e. Available only through HUD licensed Real Estate Brokers

Take advantage of this hard-to-come by opportunity. If you know anyone who is looking to buy or invest in a home, now is the time to purchase a home at a bargain price while taking advantage of extremely low interest rates and of generous buyer incentives.

January 18, 2009 at 3:58 pm Leave a comment

Important Tip on Buying New Built Homes

We had an office meeting yesterday to plan our monthly meetings for the new year. Interesting ideas and experiences of Realtors on their transactions were shared. One transaction that I thought was worth sharing was an experience shared by Realtor A.

Realtor A cautioned against builders who promote deep discounts on the purchase price of a new construction home and later inflating buyers’ closing costs. This was apparent when Realtor A represented the buyer on a new- built property. The price of the home was a steal, but the buyers were to pay their own closing costs. Halfway through the transaction, the Realtor reviewed the HUD statement showing the itemized closing costs and found out that the builder overcharged the buyers on title fees by as much as $500.00. Realtor A called the builder and the $500 was deducted.

The lesson of the story: It’s great to have buyer representation on new construction homes or resales. Builders have hired their own Realtors and employed them to represent the builders in selling new homes. Those Realtors have the builders best interest in mind, not yours as a buyer. It is prudent to seek the services of your own Realtor to represent you and walk you through the negotiation, contract, your rights as a buyer and different aspects of the transaction.

As a buyer, you do not have to pay the Realtor to represent you — the seller pays for the buyer’s Realtor’s fees. Therefore, the service is FREE to you and you get the benefit of someone who will represent your best interests.

By the same token, I have represented a buyer on a new-built home. The previous buyers fell out of escrow, and the home was close to completion except for the kitchen counters. During inspection, the kitchen counters were not installed as the builder’s representative had promised and my client was not able to do a complete inspection of the property. I asked for a $100 gift card for the inconvenience that the builder put on my client and his disappointment with not doing a full inspection. The builder agreed to the $100 gift card along with a list of things for them to correct on the property including cosmetics, cleaning and more. We were able to negotiate a 3 percent closing cost and reduced purchase price. My client came out with no out of pocket expenses as a result.

January 16, 2009 at 11:32 pm 1 comment

New Loan Modification Software Launched

Last week in Phoenix, I witnessed the launch of a new software program called “Loan Mod Exposed“. For much less than what a home owner would normally pay a professionally negotiator, one can purchase this do-it-yourself software. The software is able to determine if your financial situation is a strong candidate for a successful loan modification or if you are a candidate for denial.

The software CD-ROM comes with a book and walks the home owner through filling out the different documents required by your particular lender to process a loan modification, similar to what Turbo Tax or Tax Cut software would do for taxes. It makes you aware if dollar amounts you enter do not make sense or need recalculation. If your financial profile does not fit the criteria set forth by your lender to approve a loan modification, the software provides you with suggestions on how to adjust your numbers to conform with your lender’s requirements.

This software is the first that I have seen in this arena. It’s interesting and exciting to know this new program exists, especially for those who are thinking of a loan modification and don’t know what first steps to take. This software hopes to educate homeowners regarding their lender’s guidelines prior to seeking the assistance of a professional negotiator. Eventually, this can save the homeowner money if he or she decides to take on responsibility for the documents all the way to the lender.

Only mortgage brokers and lawyers are qualified by law to negotiate loan modifications on behalf of home owners. Realtors are not qualified to modify loans; however it is acceptable for the home owners to negotiate their own loan modification with their lender.

The new Loan Mod Exposed software will be available for sale soon. For more information about this new program, contact Duc Nguyen at (520) 977-3853 or email duc@cenpaco.com.

January 13, 2009 at 1:05 am 2 comments

The Times Says the Time is Now

An article published by The New York Times a month ago provides home buyers several reasons for purchasing a home now instead of holding off. First, today’s real estate market offers great buying opportunities. Interest rates are historically low and home prices are affordable. If you have a good credit score, enough money for a down payment, don’t need to sell another home and plan to hold on to your new home long-term, there should be no reason for you to wait.

But if you are waiting for the market to bottom out, good luck – I truly hope you time it perfectly. Real estate is not about market timing, it is about enjoying the freedom of home ownership with a mortgage payment you can afford. Do not let greed get the best of you – otherwise, you may wait and wait and before you know it, you’ll have missed the train.

For the complete article, go to: http://www.nytimes.com/2008/12/06/business/yourmoney/06money.html?pagewanted=1&_r=3&adxnnlx=1231304149-1uw8qNLYI/fnq/Rt1rp3LA.

January 7, 2009 at 11:58 pm Leave a comment

Light Rail Musings

I am proud to be a part of history today. I rode on the Phoenix area’s first ever light rail line from Mesa to Phoenix. Dec. 31, 2009, was the last of five days to ride for FREE on what’s been dubbed “Metro.”

I wanted to experience the benefits resulting from our tax money and also explore real estate opportunities along the light rail transit route. I saw many apartments along the line in the town of Tempe and new condominiums just finished in Phoenix. While aboard the shiny new train, I told myself it would be a good decision to invest in a property in the Tempe/Phoenix area close to the light rail line.

The prices are very low and the interest rates are historically low as well. You can buy a lot of house for very little money. Rental demand in this area is high, as it is close to downtown Phoenix, Sky Harbor Airport, Arizona State University and several freeways, to name a few.

My family and I boarded at the Apache Blvd. and 101 Freeway stop. It was the third stop going west to Phoenix, and the train was already packed with passengers. There were no empty chairs to sit on and you had to grab a post before someone else did to keep your balance. The train ride was smooth.

The line runs from Main Street and Sycamore in Mesa to Montebello and 19th Avenue in northwest Phoenix. I certainly hope, based on our initial experience, that the Metro will expand someday soon to include routes that will connect Chandler and Queen Creek in the East Valley to the Glendale area in the West Valley. The Metro is a benefit to Metro Phoenix residents, businesses, tourism, real estate and a great way to use taxpayers’ money. (For a brief video I shot at the Mesa station where we boarded, click here — several other area residents have also documented their light rail experiences on YouTube, as well.)

January 3, 2009 at 6:10 pm Leave a comment