Charlottesville Real Estate Auctions vs. Traditional Sales? .1
May 14, 2009
This is a great topic for home sellers as they do not really understand the auction method of sale as it pertains to real estate. So, is selling your home at auction a better way to go rather then listing it with a traditional real estate agent?
The answer is an emphatic yes.
The auction method of sale gives consumers many more options when it comes to selling their home. But before I speak to the advantages let’s clear up some of the misconceptions. The word auction does not always mean foreclosure or short-sale. The auction method of sale is absolutely not always for distressed situations. This method of sale and the psychology behind it generates a tremendous amount of curiosity and interest for home buyers. Just seeing the word Auction on a real estate sign or in the MLS get buyer’s energized. If the auction is marketed correctly and administered ethically by an Auctioneer, the community will recognize this means of sale as a positive and not a negative. Buyers will always want to preview auction properties before traditional real estate listings.
The auction buzz
So now you have the energy and a buzz around your property that is being sold at auction. What are the advantages? The first advantage is flexibility. If you list your home with an auction firm, make sure they are also licensed to carry out traditional real estate sales, too. If the home does not sell at auction then it can immediately come on the market in the traditional sense. This will give you a competitive advantage with respect to a sales strategy. Yes a sales strategy, more tools that can bring an actual signed sales contract in less than 30 days. By coupling the auction method to traditional real estate sales you have created the perfect situation to sell your home.
PART 2 - CLICK HERE
700 Billion Dollar Solutions… Charlotteville real estate
March 2, 2009
Special thanks to Gabe Houston for his proposed “SOLUTIONS” document on the subject. After months of encouragement, Mr. Houston has memorialized our collaborative thoughts and conversations to paper. The proposed SOLUTION is a response to a letter sent from Leo W. Gerard of the United Steel Workers Union to Treasury Secretary Paulsen, dated October 28, 2008. In this letter Mr. Gerard clearly outlines the short comings of the actions taken by the Congress with the $700 billion dollar bail out.
This document provides an economically responsible and realistic solution that was ignored in the frenzy of the last actions of an exiting administration.
Mr. Houston and I have first hand knowledge of the banking sectors’ unwillingness to take losses and liquidate their non-performing assets. There have been an innumerable amount of investors standing in line offering to buy billions of non-performing REO assets from the banks holding the properties. These investors are simply seeking to assume the risk and gain any potential profit in converting non-performing assets into fully performing investments.
The greed of the banking sector prevailed as banks were unwilling to liquidate their REO holdings for relatively small realized losses. The banks refused offers by fund managers, portfolio managers and individual investors to purchase both individual properties as well as bulk REO portfolios at 50-75 cents on the dollar. The banks to date have refused to liquidate their losses at any amount below 80-95 cents on the dollar. Thus plunging the credit market into what the banks conveniently and erroneously label “liquidity problems”. Lack of liquidity implies there are no willing buyers for a willing seller. The current “lack of liquidity” in the housing market is simply a result of the banks unwillingness to sell their REO holdings to the market at current market prices. Today’s prices are deemed “too low” by the banks. Selling at the current bid price requires the banks to take a loss on their investment as a result of their poor and irresponsible investment underwriting. Instead of realizing these losses, the banks sought and received a governmental bailout on the backs of the U.S. taxpayer. Read more
Charlottesville real estate | New 2009 Conforming Loan Limit by Zip Code
February 12, 2009
Here are the new updated conforming mortgage loan amounts as well as jumbo loans. Please CLICK HERE for a detailed look by zip code. If you have any underwriting questions please do not hesitate to ask. The guidelines are tight and we may have some great tips for getting the loans to fund. If you do not have Excel then comment this article with you Zip and I will shoot you back the amount.
Thanks,
Roy Slater / www.Hathaway-realestate.com
Charlottesville Home Sellers Face the Deaded Financing Contingency
October 18, 2008
The buyer financing contingency has left many sellers bitter and back on the market. How can this happen? The buyers had a pre-approval letter. What went wrong?
As a mortgage broker licensed in numerous states and one that has come from direct lending institutions such as GMAC-Ditech.com and LendingTree.com, this issue is one that I could write a book about. But I will try to keep it simple and to the point.
The reason why the financing contingency gets used so much is because most Realtors do not have access or foreknowledge of the mortgage process nor do they have access to mortgage lender guidelines to know what the reality is with respect to what a qualified borrower really is. Couple this to the fact that lender pre-approval letters are all conditional until an underwriter reviews and approves. Moreover, add in the fact that your loan officer is not an underwriter and his pre-approval may be incorrect.. The summation is a recipe for disaster.
So, how do I avoid this mess as a seller?
Well… you need to choose you Realtor wisely. Selling your home is not just about a Realtor’s fancy marketing plan. It is about a Realtor’s ability to also identifying quality offers and in scoring buyer risk should you accept an offer. It is about having the where-with-all to ask a buyer the appropriate questions in the negotiation process in order to score buyer risk and eliminate financing contingencies.
Within minutes a knowledgable mortgage person can know whether or not a buyer is solid or not. So, if you can ask for the following items in your buyer counter offer it will help tremendously: (related article click here)
- credit report
- ask how the buyers get paid( w2, 1099, or self employed) key questions to score risk. if there is 1099 or self employed income then risk goes thru the roof. For more info on this drop me a comment and I will go thru why.
- a copy of asset statement showing down payment.
- require loan officer name, phone number and access to all loan information
This information can really help you sore risk and leave a prospective buyer no out with respect to a financing contingency escpecially when this information is used correctly. Of course this information is useless unless your Realtor knows how mortgages work, current product guidelines and the knowledge of current programs available.
end
Roy Slater
Hathaway Real Estate
- Charlottesville Real Estate
- Southern California Real Estate
Charlottesville Real Estate - Smart Home Sellers Avoid the Home Inspection Time Bomb
October 13, 2008
Serious Charlottesville home sellers along with direction from Realtors can easily navigate thru home inspection time bombs. Seasoned listing agents help sellers avoid the home inspection contingency by ordering a home inspection on the sellers behalf before the home goes on the market.
The home inspection contingency across many states is the easiest way for many buyers to jump ship on a contract. The home inspection contingency usually allows buyers the perfect exit to a contract at any hint of possible delayed maintenance or construction issues no matter how minor. Buyers simply counter back unreasonable repair requests, cancel the contract altogether, and goes as far as trying to devalue the home in order to renegotiate a lower price. Canceled contracts in a declining market can be a major set back for home sellers.
To minimize these setbacks, it is strongly recommended that sellers have the home inspected before it goes on the market. Don’t bury your head in the sand and hope nothing is wrong with your home. Get the issues fixed ahead of time and get top dollar for your home. Use the your home inspection as a tool to lock down prospective buyers. By heading off problems ahead of time, you can easily avoid contract cancellations and leave buyers with no wiggle room for cancellation with respect to home inspections.
Remember, serious and professional listing agents require home inspections for their clients ahead of time. In many cases many of the top listing agents will not take a listing without one. They do not like ticking time Bombs either. Selling homes is a serious responsibility and should not be taken lightly with a wait and see attitude especially in today’s market. Take the time and effort to neutralize possible contingencies before they come back to haunt you. Look for the next article on nuetralizing the dreaded financing contingency.
700 Billion Dollar Bail Out Illustrated
October 13, 2008
In case you have not seen this topic illustrated, I think this link would be a good one. It very effectively and with comedy illustrates the main cause of this mortgage mess we are in. This 700 billion dollar bail out has many Americans scratching their heads. Many are just not sure whom to point the finger at while others are pointing the finger at everyone.
Please, I encourage your comments on the blog. There are a lot of opinions on this matter that would be great to see. Who do you blame?
Please click here to visit the presentation >>> (please be aware there is some profanity)
Charlottesville Short Sale and Foreclosure Tax Consequences
July 29, 2008
This is one of the big questions always asked by clients in these tough situations. There is a lot of mis-information on this subject which leads to fear. Fear of the unknown, just compounds these tough situations. So, I have enclosed a link that should shed more light on the tax consequences of short sales and foreclosures. This should help clear up confusion and hopefully some of the agony with respect to this “fear of the unknown.” Hopefully this information will aid you in a most trying time.
Link to tax article: Go >>>>
Important: Always consult a licensed professional if you are not sure about your situation. Remember, a Realtor is not a CPA or an attorney. So unless they are, always direct your technical question to a licensed professional.
Charlottesville Real Estate - Your Mortgage Crisis Does and Dont’s
May 19, 2008
Unfortunately this is an extremely difficult subject for homeowners. With the emotionals ties to the home and in many cases a strong moral convictions to abide by the rules; good people still find themselves Read more
Top 10 Stupid Mortgage Loan Officer Questions
April 5, 2008
I received this joke email and I thought I would share it. Although this is a joke email, these questions are asked by borrowers and loan officers on a daily basis. Moreover, some loan officers actually commit loan fraud by structuring deals with these bits of logic. Below are the “10 Stupid Questions” and reasons why Read more
New Conforming Loan Limit Increase Has Too Many Strings
March 18, 2008
After reviewing Fannie Mae’s and Freddie Mac’s Jumbo Conforming loan guides, it appears that they have come up with an extremely cautious plan to administer the new Jumbo Conforming limit increase. Let’s be clear, this is not what Americans thought it was going to be. (Fannie Mae Guides & Freddie Mac Guides)
The GSE’s have created a new hybrid program for consumers. It is not a Conforming loan. This new program is purely and simply all but a symbolic gesture of help. It is tailored to dissuade refinances through ultra-tight underwriting guidelines while being some-what attractive to new home buyers, assuming you have perfect credit and a 10-25 percent down payment.
Unfortunately, many of the loan origination calls coming into lenders for this new loan product are for refinances. These consumers just cannot qualify. Of course you would assume they do not qualify because of income or debt ratios, but loan originators do not even need to get that far into the loan application process to decline these borrowers. In most cases their first mortgage exceeds 75% of the value of the home. The deal is immediately dead.
As far as rates are concerned, the rates follow closely to the normal conforming products. So a relative thumbs up with respect to rates. The new Jumbo Conforming product is about .125%-.375% higher in rate compared to the old standard conforming loan across different lenders. Below is a quick rate comparison based on today’s rates.
Conforming 30YR Fixed
5.75% / 0 points
Jumbo Conforming 30YR Fixed
6% / 0 points
So if you were applauding this portion of the stimulus package, I would not applaud quite yet. This new hybrid, conforming product may not have the impact on the economy lawmakers may have suggested. Not surprising as we have seen this occur on some of the initial consumer foreclosure bailout policies rolled out early in the credit crunch.
One quick side note: I do want to applaud Freddie Mac for at least offering a refinance cash-out option as Fannie Mae did not. Although the guidelines are tight, they did put it in the guides.
Please feel free to put your loan scenarios in the comments so we can illustrate some of the challenges loan originators face with the new Jumbo Conforming product.
Calculate your new mortgage loan limit by Zip Code. Click Here
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