May 21, 2011 Happy No-Labor Day !!!
Interesting to note that I am writing about buying a Bad and Ugly house on a happy Labor Day weekend. The government finally endorses this affordable reconstruction/rehabilitation loan. We are not limited to selling properties sold as is to investors with huge cash, but to homeowners who can afford 3.5% down payment and will have funds to rehab a fixer upper to their liking. After close of escrow, which can be quick, your allowance for repairs can be drawn from an escrow account as you progress with your repairs done in phases. Not too many FHA 203K lenders can deliver seamlessly. Call me for a qualified 203K lender. I’ve attached an article recently posted by the C.A.R. Call me for your real estate needs or email me a line or two. My cell phone is available at 562-305-7995
Foreclosure properties, especially those with the water and power turned off, may not qualify for standard financing, but would-be owner-occupants may qualify for a federally insured 203(k) loan.
Would-be owner-occupants who do not have enough money to purchase a foreclosure home using cash, may qualify for the federally insured 203(k) loan, which allows borrowers to roll projected rehab costs into the loan.
According to one real estate expert, most foreclosure properties are sold as is, and, oftentimes, heat, plumbing, and electric are turned off, making it unlikely a lender will lend money on the home.
To qualify for a 203(k) loan, buyers generally hire an independent consultant hired by the Federal Housing Administration to review contractor cost estimates and architectural plans for things like whether the work will bring the property up to minimum standards, while not going overboard on improvements.
Buyers should be aware that not all foreclosure or esp. short sale properties are eligible. For instance, a partially built house that has never had a certificate of occupancy requires a construction loan of the kind that a commercial developer would use.
The interest rate on a 203(k) loan is approximately a quarter of a percentage point higher than on a standard FHA-insured loan, and a buyer also can expect to pay 1 or 2 points.
Also, as with other FHA-backed loans, down payments may be as low as 3.5 percent, and loan limits apply. Currently, most FHA loans are capped at $729,750.
May 8, 2011 Happy Mothers’ Day !!!
Short Sale Buyers from the Listing Agent’s View Point (Editorial)
It is admittedly exciting to hear a buyer ask me if I could represent them in purchasing my short sale listing they called on. My dilemma is, more buyers are doing the same recently. That reminds me of my duty: to get the highest, best and final price, and most importantly the one buyer who can deliver on promised time. To a diligent, integrous listing agent faced with multiple offers from direct buyers or buyer’s agents, it can become a a bidding war in a closed room, and only a courageous and powerful agent will be willing to disclose to all offerors where they stand. A brave listing agent should only keep one good offer and ask the buyer in 2nd position if they are willing to be a back up offer, and let go of the others.
If we slice and dice what I meant by my duty as a listing agent, the buyer who gets to be chosen would fill my needs this way:
Highest Price – an offer that the current market can bear. Big and impressive earnest money deposit sweetens the pie.
Best offer means best terms,, noncontingent, AS IS, in the order of preference: CASH, conventional loans with biggest down payment, government supported loans with super A quality buyers.
Support your offer with proof of funds, bank statements should state your name; I am not your mortgage broker, so I don’t want to see your account numbers. Black out the account numbers on all pages before you submit your supporting documents.
Your preapproval letter if financing your offer should clearly state the name of the loan officer, his/her email address and cell phone number. I save those cell numbers and ID them in my cell phone. Preapproval letter stands stronger than a Prequalification Letter.
Final Offer – express it to the listing agent because there is no room for guessing games or tryouts; give your final best.
Timely delivery – usually time starts from the moment the short sale lenders issue an acceptance letter; if there are two liens, the time starts from the acceptance by the 2nd lienholder. It goes very quick from that point. 30 days closing from such approval letter is the best time frame an offeror can write. By that time, the chosen buyer’s lender is ready to order the appraisal and loan documents can arrive in time . 30 days is enough time to do the buyer’s due diligence and appraisal. I cannot see any reason why such buyer cannot deliver in 30 days from short sale approval. They had waited for at least 30-45 days to get the short sale approval.
November 23, 2010 In my opinion:
This is the 3rd cycle I have witnessed ever since I got licensed (1981). People with cash buy up and they are the ones who will profit the most when economy turns around, if they hold on to their properties. It is also them who benefit a lot by flipping properties. If you don’t have all that cash, hook up with an investor-flipper. They buy the house as is, cash, for you, and you ready yourself to close with your affordable financing like FHA. There are flipping rules that keep changing, so always confirm what it means to you as the buyer. Best source of information is the Department of real estate in the state where you are buying. Ask a local realtor you can trust, to tap into their State Association of Realtors. California Association of Realtors (CAR) has big library of information. I am licensed in California. Feel free to email me any request for information on real estate rules, market trends, available housing and affordable financing.
