Another change is taking place in the mortgage arena. A recent HUD letter to lenders is shifting more responsibility to lenders regarding financing condominiums, at least that is how I read it. I was alarmed today when I heard one of our wholesalers will stop accepting FHA spot approvals next Friday. Up to now lenders were able to approve a condo for FHA insurance when it was located in a project that was not approved by FHA. That process is being eliminated.
Of course that sounded bad to me. Just another option eliminated. But then I actually read the letter, and it does not sound bad at all. In fact it sounds good. Lenders are going to be able to approve the entire project instead of just one unit. There will be limitations, no more than 1/3 of the project can be financed using FHA, but it is a big move in the right direction. Thousands of additional condos in the Louisville area could now be eligible for maximum FHA financing. AAAhhhh, folks that could make your condo worth more!!!
You can read the letter for yourself: Click here
Monday, July 20, 2009
Saturday, July 18, 2009
Trading Real Estate Made Easy
There has never been a better time to trade real estate than now. I have been involved in one capacity or another in the trade of hundreds of properties. Well, actually thousands of properties, every sale is nothing more than trading a property for money. But for this article we will stick to actually trading one property for another. I have traded properties for myself and on behalf of clients. These transactions have ranged from a simple swap of one property for another to very complicated 1031 tax-deferred exchanges involving multiple parties and properties. Additionally, I have financed scores of other transactions involving trades.
A few minutes ago I checked the local MLS and found nearly 10,000 residential properties listed for sale. That is a lot of inventory. When someone lists their home for sale it is a very good sign that they want to move. And yet every single one of them is using passive methods to attract buyers. Listing the property for sale, yard signs, fliers and ads in publications are all passive attempts to get a buyer to step up to the plate. Don’t misunderstand; there is nothing wrong with advertising a property for sale. My point is that all of the traditional methods are saying to the prospective buyer, “Come to me.”
What I am suggesting is a seller could switch sides. Instead of waiting for a buyer, become the buyer! Go out and offer to purchase a property using the equity in your existing home. Will it work every time? Of course not, but on the other hand, that sign in your front yard is looking a tad rusty.
The steps for making a trade are not all that different from actually buying a property outright. Chances are you will need financing, so get pre-approved for a mortgage. Then go out and shop for a home, ask the seller or their agent if they will consider a trade. Very often the reply will be, “Trade for what?”
What do you know? We found a prospect! Now what? Don’t chicken out now, make an offer. I suggest keeping it as simple as possible, “I’ll buy your home if you buy mine.”
It may be easier if you think of it as two separate transactions. In fact, if you treat it like two separate transactions on paper it will make it easier to reach the closing table. Realtors, lenders and title companies are all accustomed to dealing with one sales contract for one property. Just be sure to include a clause in both contracts stating they are contingent upon the other party buying the property located at… and further a simultaneous closing of both transactions. In one contract you are the buyer and in the other you are the seller.
Call me if you need help.
A few minutes ago I checked the local MLS and found nearly 10,000 residential properties listed for sale. That is a lot of inventory. When someone lists their home for sale it is a very good sign that they want to move. And yet every single one of them is using passive methods to attract buyers. Listing the property for sale, yard signs, fliers and ads in publications are all passive attempts to get a buyer to step up to the plate. Don’t misunderstand; there is nothing wrong with advertising a property for sale. My point is that all of the traditional methods are saying to the prospective buyer, “Come to me.”
What I am suggesting is a seller could switch sides. Instead of waiting for a buyer, become the buyer! Go out and offer to purchase a property using the equity in your existing home. Will it work every time? Of course not, but on the other hand, that sign in your front yard is looking a tad rusty.
The steps for making a trade are not all that different from actually buying a property outright. Chances are you will need financing, so get pre-approved for a mortgage. Then go out and shop for a home, ask the seller or their agent if they will consider a trade. Very often the reply will be, “Trade for what?”
What do you know? We found a prospect! Now what? Don’t chicken out now, make an offer. I suggest keeping it as simple as possible, “I’ll buy your home if you buy mine.”
It may be easier if you think of it as two separate transactions. In fact, if you treat it like two separate transactions on paper it will make it easier to reach the closing table. Realtors, lenders and title companies are all accustomed to dealing with one sales contract for one property. Just be sure to include a clause in both contracts stating they are contingent upon the other party buying the property located at… and further a simultaneous closing of both transactions. In one contract you are the buyer and in the other you are the seller.
Call me if you need help.
Thursday, July 16, 2009
Deadline Fast Approaching - $8,000 First-Time Home Buyer Tax Credit
I realize all of the counters posted on the web show 137 days left until the deadline. While that is true it does not take in to consideration the amount of time necessary to find a property, make all of the arrangements and actually “buy” a home. I have helped hundreds of people purchase their first home, and usually they move very slowly compared to those that have been through the process a couple of times.
The entire procedure can take from 30 to 45 days for well informed and experienced home buyers. Add a couple weeks to that for buyers that are new to the process and the deadline to get started is about 60 days from now!!!
The First-Time Home Buyer needs to have a home selected, under contract and financing in the works by November 1st to be safe. It simply takes time for inspections, repairs if necessary, appraisal and title work.
There are many things you can do to stream line the process. Save all of your pay stubs and bank statements from this point forward. Keep all of the pages for every bank statement, one page missing and the underwriters are not allowed to accept that statement for documentation. A simple mistake like a missing page can add a couple of days to the processing period. There is no grace period for the Tax Credit (yet). November 30 falls on a Monday this year and if you have not closed by the end of the day then on Tuesday your name is Trout and you are out!!!
Another tip, any deposit on the bank statements you provide that exceeds your pay check will be questioned. Keep copies of everything if you sell a big ticket item like a car, make a copy of the transfer, the check, your deposit slip, etc.
If you are using an FHA loan to finance the purchase you will need a copy of the FHA Amendatory Clause signed and dated on or before the date the sale contracted is accepted. The tricky part is it must be signed by everyone, buyers, sellers and Realtors. I posted a blank copy of this form on my Application Web Site in the resource section under forms. Apply for a loan while you are there, would love to help. http://JamesSimms.com
The entire procedure can take from 30 to 45 days for well informed and experienced home buyers. Add a couple weeks to that for buyers that are new to the process and the deadline to get started is about 60 days from now!!!
The First-Time Home Buyer needs to have a home selected, under contract and financing in the works by November 1st to be safe. It simply takes time for inspections, repairs if necessary, appraisal and title work.
There are many things you can do to stream line the process. Save all of your pay stubs and bank statements from this point forward. Keep all of the pages for every bank statement, one page missing and the underwriters are not allowed to accept that statement for documentation. A simple mistake like a missing page can add a couple of days to the processing period. There is no grace period for the Tax Credit (yet). November 30 falls on a Monday this year and if you have not closed by the end of the day then on Tuesday your name is Trout and you are out!!!
Another tip, any deposit on the bank statements you provide that exceeds your pay check will be questioned. Keep copies of everything if you sell a big ticket item like a car, make a copy of the transfer, the check, your deposit slip, etc.
If you are using an FHA loan to finance the purchase you will need a copy of the FHA Amendatory Clause signed and dated on or before the date the sale contracted is accepted. The tricky part is it must be signed by everyone, buyers, sellers and Realtors. I posted a blank copy of this form on my Application Web Site in the resource section under forms. Apply for a loan while you are there, would love to help. http://JamesSimms.com
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