Sunday, February 28, 2010

Lock those doors when showing homes


Quite the ironic thing happened to me yesterday while showing foreclosures and short sales in Chesterfield and Bon Air. I was remarking to my 1st time home-buyer clients, a happy young couple engaged to be married soon, how I always lock the door behind us, because people tend to show up to foreclosures and just walk in on you. Like many of my clients, they were surprised to hear of a strange story like this. Well, wouldn't you know it that at our next house which had a 2nd home for sale right next door, we came out of the showing and a car pulls up and a thug-like creature wants to know about both homes and know if I'm the owner or my clients or the Realtor and etc.. Truth be told, I was ready to get out of there, because this gentleman (and I'm using that term loosely here) was scary looking indeed. So, I told him that he should call the listing agent from the sign and that we had to get to our next home on our list. He didn't seem to understand the concept and we just left him standing there in the front yard to his thoughts. I was thinking he might follow us to our cars, but he did not.

This is by far, not the worst encounter I've had in my years in real estate, but simply a reality of the world we live in. He could've been harmless or he could've been danger incarnate, but I wasn't about to find out. Just know this, do everything you can to protect yourself as a real estate client or agent and lock those doors when showing homes, because then at least you'll not be surprised by anyone in a closed non-public environment.

Saturday, February 20, 2010

Interest Rates set to Rise in April and Beyond?

This message was recently sent to me from my District Director and I thought it pertinent enough to blog about...

The Fed has told us repeatedly that their massive purchasing program of Mortgage Backed Securities is just about over - and this translates to home loan rates rising in the near future.

As you can see in the chart below, the amounts of Mortgage Backed Securities the Fed is purchasing are slowly dwindling, as the program is set to wrap up by March 31st, and are clearly trying to ration out the remaining portion. Last week, the Fed purchased $11 Billion in Mortgage Backed Securities, which leaves them with $66 Billion to spend out of their original $1.25 Trillion allotment. So about 95% of the total has already been spent and has purchased about 3 out of every 4 home loans during the past year. When such a large buyer leaves the market, it is very likely that prices will worsen.

This is very important because as the Fed has less money to last through the remaining months of the program, their ability to keep home loan rates low via their purchasing power will wane. Those who can take advantage of currently low home loan rates do not wait, as the clock on these historically low rates is ticking.

The Fed is also planning to switch their benchmark from the commonly watched and monitored Fed Funds Rate, to a new benchmark based on interest they pay on excess bank reserves they hold out of the monetary system.

Banks have been ignoring the current benchmarks and charging inter-bank rates as they see fit. The Fed wants to fix this by using the amount of interest they pay on excess reserves as the new benchmark, since the Fed has total control of this rate, which should be right at or just under the Fed Funds Rate.

The one major take-away from this discussion is that the Fed is getting their ducks in a row as they prepare to push interest rates higher. And when they do increase rates, the Fed does not want any obstacles that may undermine their plan.

Monday, February 8, 2010

Another strong niche - HUD homes


While I am a GREEN Realtor and am actively pursuing going with a GREEN title company for at least some of my real estate closings, meaning no paper documents, I am also carving out quite the niche with HUD homes as of late.

I have 3 active pending contracts on HUD homes and amazed at the deals that can be found with these US Govt-owned foreclosures. Just last week, I saw where a home in the West End that was appraised at $124,900 and listed at $99,600, sold for $54,000. While this type of deal is not always possible, there are great values to be had. Why?

Well, every HUD home has a government inspection done at time of listing. Most of them are approved for FHA loans, which is often a question for bank-owned homes that you don't know the answer to at time of contract until you've spent $450 with your mortgage lender (that very well could be wasted if it doesn't pass). Also, you can see a Property Condition Report which serves as a poor man's Home Inspection. The best part for agents is that you can make up to a 5% commission and get up to 3% of your buyers' closing costs paid for. You have to be working with a Realtor to buy a HUD home and specifically, a HUD-approved agent/broker. Once you've identified a property you can submit a low-ball bid and then if not accepted, just up the bid every day until it is accepted (unless its sold to someone else in the meantime).

These HUD homes can be great finds/values for first-time homebuyers (depending on the condition), investors (rentals and/or flips), and experienced home buyers alike.

Feel free to give me a call if you'd like to learn more!

Tuesday, February 2, 2010

How are you doing with your New Years Resolution?


The calendar has now turned to February and many folks have already slipped off the tracks with their New Years Resolution. Is this true for you as well?

Well, if your New Year's Resolution included buying or selling Real Estate this year, then now is the time to get off the couch and call a Realtor! Your best opportunity to sell is now, as I have previously blogged (because of the tax credit extension/expansion). Additionally, your best deal to buy is probably now, because of the combination of low prices, low interest rates, tax credit (if applicable), and likely possibility of higher down payment % with FHA (likely going to 5% soon).

If nothing else, you can start small by checking out Realtor.com or logging onto a Realty website, especially Zip Realty's as its the most user friendly. As you learn the market, you can determine with a Realtor's help (if so desired), what your next steps should be.

Stay on track and accomplish your real estate resolutions in 2010!!!!