Archives

May 2009

Credit Card Curtail

Posted at 6:37 AM, May. 22, 2009

This is a step in the right direction.  Congress has now passed a bill that will prevent banks from arbitrarily raising interest rates on consumers. 

The new regulations would make it harder to get credit to those under the age 21 and banks would not be able to raise interest rates unless a consumer was no less than sixty days delinquent and to reinstate previous rates if the consumer has paid the minimum payment on time for at least six months following.

Banks on the other hand, argue that this is a tremendous blow to the economy for it will force them to raise the bar of interest rates to all credit card holders and to bring back annual fees.  The claim is it will make credit even harder to acquire. 

It's about time. 

Foiled Again!

Posted at 6:31 AM, May. 21, 2009

Of course it was too good to be true.  Apparently, despite the announcement issued from HUD on May 12, 2009. the incentive that would allow first-time home buyers to monetize the tax credit of $8,000 towards a down payment has been retracted. 

According to officials, the incentive resembles the now illegal seller assistance with down payments on FHA loans.  The IRS also has stated it's concerns on the implications to future tax returns.

We've been told there is efforts being put forth to come up with a solution that will shorten the gap in the bridge between buyers and loans.  Let's hope so.

You Can Now Get A Down Payment Via Tax Credit!!!!!

Posted at 7:47 AM, May. 15, 2009

This is HOT off the press, HUD just released a statement that reports that FHA is NOW going to allow the 2009 Tax Credit of $8,000 to be "monterized" at the closing table so that first time homebuyers can use it as part of their down payment!!!!!  This has been a continuous effort on the part of National Association of Realtors who have been pleading with goverment to make this a possibility and help get buyers into homes.  Read the story from the Association here.

The money is being borrowed (just like an advance on your paycheck) but it is still $8K you didn't have in the first place.  If buyers fail to pay it back from refunds at tax time (without interest) it will have be added to the current mortgage with interest. 

How buyers are going to go about this is, once they identify their property of purchase with contract, they need to contact their CPA to file a ammended tax return with a 5405 form who will then send it off to the IRS.  Once received, the money will be wired into a designated bank account within 7-12 business days and will be considered verifiable funds that all lenders will accept. 

So if you have been hesitating about buying, STOP!  It does NOT get any better than this.  Call your lender or your trusted Realtor today.

Are Realtors To Blame?

Posted at 5:24 AM, May. 15, 2009

Alright, I just can't help but get in on this debate.  I just received a video clip from FoxBusiness.com (via Coldwell Banker) regarding a recent interview with our chief CEO.  The main topic is, should real estate agents bare blame for the housing mess?  Well...

First and foremost I will answer the direct overall question that was unsaid.  Yes, there have been, currently are and will always be the few in the business that spoil the bunch.  We are held in contempt by the average consumer as being money hungry, immoral and down right shady.  This is not your average Realtor.  Like any profession, there are mostly good, and some, not so good.  The character of the person should be held in question, not the occupation.

Now to the direct question that was being asked, is it right for an agent to take a commission (the reporter stated 6%) representing the buyer for a property than turning around and getting a commission again for representing that past buyer (now current seller) in a short sale/foreclosure situation?  The question eludes that agents who have been involved (or as this report suggests, somewhat responsible for the seller being underwater) should try to sell that home for free.  I have to again ask, why is it that people become blinded when they think of commission as means of payment?  If I were a doctor, I could just bill you for the time spent with you regardless if I fixed your problem or not.  Same applies to an attorney.  You are billed whether you win or lose (so to speak).  So, should real estate agents just start billing flat fees for anytime spent on a property regardless of performance?  Do people forget that we can spend months on a property putting up our own hard earned dollars risking that the property might not sell and we too are out money?  We are not always rewarded for good works with payment.  In fact, every agent can recall how often they have lost money on dead listings and flaky buyers.

 Let us not forget the most important factor here, accountability.  NO ONE made the buyers buy.  That was a sole decision.  Were they advised to buy more than they should, possibly, but in the end, the bills were theirs and theirs alone.  If you can't make an adult decision and accept the consequences and responsibility that goes with that, well I'm sorry.  Enough of the finger-pointing and blame shifting.  We are  accountable for our own actions, regardless of the advise we heeded. 

In addition to that note, there is no one factor as to why a person loses their home.  It's not just because of adjusting mortgages.  In fact, the primary reasons people lose their home is due to job loss and/or medical debt/illness.  No super star Realtor is going to be able to tell if someone is bound to lose their job or go on sick leave in the future.  Nor should we be expected to.  We are not responsible for individuals saving or spending habits.   I can speak first hand.  My husband was just laid off from his job.  I could very well be facing losing my home even though we did not buy out of our financial capabilities or have an adjustable mortgage.  My income however, is unpredictable.  You can only prepare for so much.

 On a final note, FYI reporters, if the property is foreclosed on (or a short sale for that matter), the bank can influence and decide what commission will be paid out, not the seller.  Often than not, it is considerably less than the time, energy and frustration involved to get one of these deals to the closing table.  Let's grow up people and look forward to correcting the problem instead of figuring out who caused it.  The answer won't change anything nor will it necessarily make the public any wiser. 

Open House Tips For The Do-It-Yourself

Posted at 5:23 AM, May. 14, 2009

• Advertise your open house. Ideally you should advertise both the weekend before and the weekend of the open house. Check with the local paper to see when their ad closing deadlines are.

• Create a property summary sheet. This sheet gives prospective buyers an overview of your home. Include dimensions for each room, copies of a property survey, summaries of utility costs and property taxes, and a list of when capital items, such as roofs and furnace, were added.

• Develop a sign-in form for prospects’ addresses. You’ll ideally want both phone numbers and e-mail addresses to follow up with prospective buyers.

• Put up signs. One or two days before the open house, place directional signs at major intersections within three to four blocks of your house. Be sure you check on anti-sign regulations in your area.

• Get your house ready. Remove clutter, clean your house, wash your windows, add flowers, turn on lights, open draperies and blinds, remove valuables and breakables, confine pets, turn on soft music, and set up a table for your property fact sheet near the entrance.

• Develop a follow-up sheet. Getting feedback on your home from prospects who attended your open house will give you a better understanding of how to make your home more appealing to buyers.

Multi Unit Maneuvers

Posted at 12:46 PM, May. 10, 2009

I recently started working with a buyer who is in the market for a multi-unit building in the West Ridge (aka West Rogers Park) area.  This particular sector has proven to be quite the challenge. 

I have already been shopping for a large entity since January and have seen over 100 multi-family buildings on the Northwest side of Chicago including Albany Park, Irving Park, Dunning, Hermosa, Logan Square, Humboldt Park, Avondale and Mayfair so I have seen my fair share.  What has made this particular market so difficult is the amount of the buildings that are either in foreclosure or in a short sale situation.  Now, couple that with tenants (aggitated and uncooperative none-the-less) and you have a day of frustration on your hands.  I can't tell you how many times I had appointments that I could not get into the building because of the tenant problem. 

The good news (from a buyer's perspective), is that this market was the hardest hit.  There is a considerably smaller demand for multi-unit buildings so values have dropped dramatically.  However, even with the great price reductions, most that I have seen are in need of repair.  There is a lot more "house" to fix.  Lastly, when the majority of the buyers out there are using FHA loans, well, you have a formula that can pretty much spell disaster.  FHA back loans require properties to have only minimal work needed and can take longer to close making foreclosures and short sales a higher risk for buyers.   So in essence, when shopping with new buyers using FHA loans and looking at multi-family buildings, you are literally looking for that needle in a haystack.

Boy I love a good treasure hunt!