Nevada Real Estate >> Las Vegas Real Estate Specialist: August 2010

Original Source: Struggling Home Sellers Should Consider Lease Options

Before I get into why you might want to consider a lease option, let me give you a little background on market statistics.

The other day, the National Association of Realtors (NAR) released a troubling statistic. In July, home sales across the nation dipped 27% year over year from July 2009. This was due to many buyers purchasing before the home buyer tax credit expired, but it's still an ugly statistic for home sellers.

Obviously, the tax credit had a major impact on home sales. Everyone who would have bought a home in July or August this year, that qualified for the credit, moved up their purchasing dates to get the credit.

The credit didn't increase sales, rather it made buyers move up their purchase to qualify for it. Waste of tax payers money? Most likely, but that's a story for another day. Back to my post:

What Is A Lease Option?

As home sales slow moving into the fall selling season, a lease option might be something that could work for you, especially if your home is vacant. What is a lease option you say?

A lease option allows someone to lease your home with the option to purchase it. It's like a glorified rental, in that the renter of your home has the option to purchase the home at the end of their lease agreement; usually 12 months. Here are some basic principles to a lease option:

The lease option binds the seller to sell and not the buyer to buy. The option gives the buyer discretion to buy or not. This is why lease options usually come with a larger deposit than a months rent. This deposit usually ranges from 2-5% of the home price. Of course this is negotiable between buyer and seller.

How do you determine price? Price can be dealt with in two ways. The buyer and seller can agree to a price when the contract is signed, or they can agree to price by when the date the option is exercised. Either way, it's usually still based on an appraisal. The monthly payment is determined by buyer and seller, and it can be applied to the cost of the home or not.

It all depends on the terms of the agreement. If the payments are applied to the purchase price of the home, if the buyer decides not to purchase the home, the seller will not have to pay that back. Basically, a lease option is the same as a lease, with the option at a determined time period for the buyer to purchase the property.

Advantages Of A Lease Option For Home Sellers

A lease option opens you up to more buyers. A lease option allows you to sell your home where you otherwise wouldn't have been able to sell it.

For example, there are many people right now that don't qualify for financing with the increased regulations in the lending industry.

Many of these potential buyers have been taken out of the market, and a lot of times all they need is more time to qualify. They may need to pay off some debt, raise their credit scores, or save up a larger down payment. Many of these buyers are very close to purchasing, but can't quite get over the hump.

For you the seller, this gives you an advantage in an otherwise strong buyers market. When I deal with sellers looking for lease options, I like to tell the buyers they get price or terms, pick one. Meaning, they can either get a better price with terms that are more strict, or they can pay more and get more lenient terms. As a seller, both will work in your favor. You either get a better price on your home, or you will get some great terms with a nice non-refundable down payment.

If the buyer doesn't exercise the option to buy your home at the end of the agreement, they forfeit all rent paid, and usually forfeit their down payment. And once this happens, you go into landlord-tenant relations, giving you the right to evict and retain your home. You may also work out another agreement, either way the ball is in your court.

Another advantage is; if you have to move fast or your home is sitting vacant, you get someone to pay your mortgage payment for you. They may also do some upgrades that could add value to the home, and you get people living in your home to maintain it.

Disadvantages Of Lease Options For Home Sellers

A lease option has it's disadvantages. One of them being having someone in your home that may not take care of it. They may trash it and leave you holding the bill, just like any renter.

Also, the buyer may not exercise the option to purchase your home and you're left with another mortgage payment when the lease runs out.

If you are unable to make payments on two homes, if that is your situation, you might not be able to find another renter. And if you try to sell the home again, you may not be able to sell it either.

The real estate market is still declining here in Logan. If you sign a lease option  today, in 12 months from now when it's time for the buyer to purchase, your home may be worth less. If you take if off the market today, you won't have the chance to sell it for today's prices. You're locked into the agreement unless the buyer defaults.

Interest rates may go up. If interest rates go up, the buyer who could afford your home today may not be able to afford it tomorrow. Even if interest rates go up only a point, it could disqualify many buyers from purchasing your home.

Why Should Struggling Home Sellers Do A Lease Option?

If you're home is sitting vacant, there are many renters right now in the Logan UT real estate market. These people are calling my brokerage everyday asking for lease options or rentals. I can't speak for other markets around the country, so I would talk to a local Realtor about markets where you live.

If you're tired of showing your home, a lease option could help you get out of the market, out of your home, and get someone who will pay part of your mortgage for you.

If your not getting any showings and you can't reduce your price, a lease option is a great way to wait out the market. Even if the buyer doesn't buy your home at the end of the option period, you still have someone paying you rent, and you can negotiate keeping a nice down payment. Plus, you could always try to sell when there is less inventory and get a better price.

All in all, if your a home seller, I truly understand how difficult it is right now. A lease option may be something you could try if your home isn't selling and you're struggling to make ends meet. If you do a lease option, be sure to consult with an attorney about terms of a contract, or talk to a Realtor about the options we can provide.

Age Restricted (55+) Communities are scattered throughout the valley.  Many offer a variety community amenities for Seniors who enjoy active lifestyles.

Sun City MacDonald Ranch is located in the Green Valley Area of Henderson, NV (zip 89012). There are 893 Homes in Sun City MacDonald Ranch ranging from 1020-2489 Square Feet.  Community Amenities Include:  Clubhouse, Community Golf, Gym, Pool, Spa, Tennis

Sun City MacDonald Ranch Market Report:

• Listings (8/15/2009):  13
• Under Contract (8/15/2009):  5
• Sold July 2010:  1

Sun City MacDonald Ranch is currently enjoying a stable market.  Since Last Month:  Listings NO CHANGE, Pendings UP +2, Sold Units NO CHANGE.

Last Month's Sun City MacDonald Ranch Market Report

View Sun City MacDonald Ranch Homes For Sale Here (Updated Daily)

More Information on Sun City MacDonald Ranch Real Estate Here

More Las Vegas Communities Here

Wanting the best deal is usually on most peoples minds when heading into a purchase of any type. We all love deals, sales, getting the best. And sometimes to brag about such deals.  Back in 1993, I still can remember a Veteran that wanted a VA loan, yet we had to try to put him into a FHA loan because of his credit. Then that became a problem because he wanted the same deal that his neighbor was getting, who was also getting a FHA loan, but I told him that he had too wait 6 months or so. And back then, credit scores didn't even exist. But he had an employment issue, having 5 different jobs in 2 years with less than perfect credit.

One key point to remember through this whole post, Not one borrower is the same. Even though these two pears look the same from the outside, they aren't the same. You can argue taste, texture, and color, just as a few differences.

Another key point?  "interest rates change daily" and "home values can change".

As we look into real estate and mortgages, how many times did someone say these key phrases??..........

  --   Well, my neighbor sold their house for $325,000 and I should be able to get the same since we have a similar house.

Okay, so let's look at the differences.

• Does your house have upgrades?

• Is one lot larger than the other?

• Is one house in average condition and the other in excellent condition?

• Does one have a superior view than the other?

• How long ago was that sale? 3 months ago? Values can change...
  

  --   My co-worker just got a 4.50% interest rate with no points and I know it's still out there, so I want that.

How could this be so different for so many?  I'll name just a few reasons why.

• Did you see the good faith estimate?  It could have many fees on it. You need to compare apples to apples.

• What was your co-worker's credit scores?

• How much money are they putting down?

• Are they getting a FHA loan or a conventional loan or a VA loan?

• What was their debt-to-income ratios for qualifying with income?

Summary : All fingerprints are not the same. This goes the same for those selling homes or trying to buy home or refinance a home. Not one home is exactly the same. Not one borrower is exactly the same with credit or scenarios. What you need to do is be able to pick a real professional and not a wanna be. Please read :  Are you begging me to lie to you?

One excellent reason why it can be even more confusing when it comes to FHA loans, when they can be manually underwritten. Compensating factors can make a borrower a better credit risk at times, and scenarios can change quickly.

Overall, there are too many variables when selling homes, buying homes, or trying to obtain mortgage financing for these homes. This is more true in today's market, considering the major changes that have taken place. You have a friend or family member in the business?  This doesn't even mean that you will get the best deal. Besides, define best, it might not be the same with your friends or family member. And what about this part...  did your friend or neighbor leave something out?  How do you know. Did they pay extra somewhere else?  Keep in mind, not everyone is upfront and or ethical. Do you want reality or fluff & deception?

• Shopping for mortgages - It's not like shopping for cars

_____________________________________________________________________________________________________

                                                                                                             FOLLOW ME ON FACEBOOK

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- FHA Home Loans - Mortgages -

Experience & Knowledge at its BEST !!!

Follow me on:

_____________________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors

Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc

Past and Present Siena Sun Colony Real Estate Market Reports

More Community Information on Siena Sun Colony Living

Siena Sun Colony Home Listings and Houses for Sale

Other Las Vegas Communities (note this site is only 1 month old on 8/29/2010 - more info being added daily!)

View Siena Sun Colony in a larger map

Understanding FHA 203(k) Program:  Part Two

Process, Procedures and Best Practices

Second in my series to help real estate agents and consumers understand the opportunities that are available in considering renovation or customization of a home at the time of purchase or as an alternative to selling in the first place.  Many, many people think that custom construction is a arena of real estate that is only available to the very wealthy.....the FHA 203(k) program is available to anyone from the first time home buyer to the CEO of a major corporation.  The program is open to anyone who qualifies for a traditional FHA loan and provides many more options above either finding the "perfect" home or "settling" for the "almost perfect" home.

The very first step in determining the advantages or disadvantages of working with the FHA 203(k) program should be a honest evaluation of whether you, as a real estate agent or a consumer, are a good "candidate" for the experience.  This evaluation has absolutely nothing to do with the financing requirements, the property or the renovation process.  It does, however, have very much to do with personality and adaptability to change and flexibility in temperament. 

Explaining and counseling real estate agents and consumers through the process is not difficult as long as all parties understand, from the very onset, the importance of attention to detail and complete and through communication between all parties involved in the transaction.  That said, I would suggest a meeting of the minds PRIOR to even considering using a FHA 203(k) program.  There are simply people who are not psychologically equipped (whether agent or consumer) to deal with the process of renovation and construction.  Word to the wise:  "Know thyself".

Having issued my "caveat" let the fun begin!  I am, and always have been, a certified "Project Freak"...I love the process of creating a masterpiece from the ashes.  Move a wall, add a room, raise a roof or update a kitchen.....these are all enjoyable past times for me and I offer my experience and passion for the process to help agent and consumer alike in uncovering the possibilities within the walls of a structure.

Process, Procedure and Best Practices

Financing a FHA 203(k) loan, on average, will take 45 days from the time of initial application to the successful closing of escrow.  It is important to understand that the closing of escrow marks the start of the renovation.  Again, setting proper expectation is crucial.  The program allows for up to six months of escrowed (impounded) loan payments to ensure enough time to complete the renovation and improvement of the home.

Step one:  Application for financing.

Time Frame:  One to three hours

The application process is very similar to traditional FHA financing, with the exception of the counseling process and instruction/implementation of the "next steps" of looking for and consulting with licensed contractors.  Expect to provide all income and asset verifications at the time of initial consultation.  Like traditional FHA financing, the consumer will need a minimum of 3.5% down payment (gifts acceptable) and assets must be verified at application.

Step two:  Meeting with the FHA counselor.

Time Frame:  One to four hours, scheduled at the time of application and conducted within 48 hours of application.  Report due within 5 to 7 days.

The role of the FHA counselor is crucial to the process and lays the foundation for the success of the renovation.   The counselor (inspector) is usually a licensed home inspector or appraiser and his/her role is to meet with borrowers at the property to determine 1). Condition of subject property,   2). Necessary health, safety or system improvements and 3).   Determine the goals and ambitions of the borrowers.

Following the initial meeting, the FHA counselor will prepare a specific work order and cost analysis of the necessary and proposed improvements to be included in the loan package.  The report is very detailed and will give a line by line explanation of the complete renovation project.

The cost of the FHA counselor varies between $400 and $1000, depending upon renovation/remodeling costs (< $7,500 and > $100,000, respectively).  This cost is generally paid upfront, but can be reimbursed through the close of escrow.

BEST PRACTICE:   Providing prospective and bidding general contractors with a copy of the FHA counselor's report (MINUS estimated figures) will expedite the bidding process greatly.  FHA standards require the bidding process to "mirror" the counselors report.  General contractors are likely to prepare a bid of "Remodel Kitchen:  XX dollars"...providing them a copy of the line by line itemization of the FHA counselors report streamlines the process considerably.  It also goes a long way in identifying price gorging or unrealistic under bidding by the contractor.

NOTE:  The choice and selection of the General Contractor cannot be diminished in the successful implementation of the 203(k) program.  This is the one area of the program that necessitates complete control of process and flow throughout the close of escrow and after wards, through the renovation draws.

Step Three:  Interviewing and selecting licensed General Contractor and procuring bids

Time Frame:  Entirely dependent upon borrower and contractor motivation and time constraints.

CAUTION:  This is the one area that can completely blow the process and time frames for the proper execution of a specified close of escrow.  Consumers need to "OWN" this as the lender and investor (or agent or loan officer) are not going to "direct" them to one contractor or another.  The program requires the contractor to be licensed, insured and bonded...outside of that the consumer MUST do their due diligence to ensure they are working with a reputable and efficient contractor.

The completeness of the plans and specifications of the remodel/renovation are required for submission to underwriting (and they must conform to local, state and federal building codes to ensure building permits for the project).

BEST PRACTICE:  There are a number of things an agent and loan officer can do to provide the home buying public on how to shop for and interview a general contractor.  This is part of the consultative nature of this product, but crucial to the project is the consumers understanding that they are very much in control (or, for that matter, out of control) of this aspect of the loan process.

NOTE:  The 203(k) program provides for up to five "draws" throughout the construction process.  With the exception of special order item deposits, the program does not permit any prepayment for services to be rendered by either General Contractor or his/her sub-contractors.  While many contractors prefer to be paid as much as one-third "up front", this issue can usually be worked through once the contractor completely understands that ALL construction funds are fully escrowed and there is NO chance they will not be paid for their services.

The 203(k) program mandates that an escrow contingency fund between 10% and 20% be held in reserve throughout the process to ensure coverage of unexpected or chosen changes to the project.

Step Four:  The Appraisal Process 

Time Frame:  Five to seven days

The most unique aspect of the FHA 203K program is the fact that there are essentially two appraisals on the subject property.  First the appraiser will determine "initial value" to determine a base line of the value as the property is at the time of contract.  Secondly, the appraiser is provided a copy of the FHA counselor's report and the accepted General Contractor's bid to work up an analysis of the "future value" of the property.

The final figures on the "future value" of the home will set the actual loan amount for submission to underwriting.  Of course, it is imperative that the loan officer has pre-approved the borrower for a loan amount at, or above, the "future value" in the first place.

The cost of the appraisal process is generally going to be around 50% higher than a traditional appraisal, and this fee is also paid on an upfront basis.

NOTE:  To be discussed further in the Part Three:  Marketing the 203K, however, it bears noting here that this is also where the opportunity lies for consumers who are slightly underwater on a under improved property to refinance and remodel to bring the property value up to a marketable and profitable condition.

Step Five:  Processing, Underwriting and Conditions

The processing, underwriting and conditional process of this program is no different than any other FHA product (at least at my company.   There is no need to send the loan package to the investor for additional approval and sign off........NOTE: I would not recommend working with any company that needed secondary sign off).

The borrowers' loan file is very similar to a traditional FHA loan, the importance is in the detail of the FHA counselor report, the contractor bids and the appraisal process.  It is imperative that these steps and processes mirror each other in detail and cost analysis/value. 

Step Six:  Close of Escrow, and the Beginning of Renovation

Once conditions are cleared, docs are ordered and buyers/sellers (or homeowners) have signed loan documents are signed funds are disbursed to the sellers and/or their lender per normal and traditional procedures.  In the case of a refinance, the underlying lender(s) will be paid in through escrow. 

Following the actual closing, the process of the implementation of the FHA 203(k) will actually "begin".

Step Seven:  The Construction/Renovation Process

There are several points throughout the process that agents/consumers/contractors/loan officers need to be monitoring the "behind the scenes" activities.  For example, the selection of a General Contractor and getting bids for the project are "behind the scenes" of the actual loan process, however, can severely impact the process flow of the loan. 

All permits must be pulled to begin the construction process and all "draws" of funds are based upon completion of certain aspects of the project (depending upon the scope of the work).  The FHA consultant, as well as local building inspectors, will provide as the stop gap, or quality control agent, for the project.  Funds will not be released until sign off by both the FHA counselor and local building inspector.

Step Eight:  Changes and contingencies

As noted previously, the 203(k) program requires a specified amount of monies set aside for any unexpected events or changes in the project costs.  As anyone who has ever embarked on a home improvement project will attest, things rarely progress exactly as planned.  There are unexpected events (like issues with wiring behind the sheetrock that the FHA counselor could not see at the time of inspection) and there are "Oh, I changed my mind" events when one realizes that the initial plan is not exactly what they want.

The "draw period" of the 203(k) program allows for changes and contingencies (whether unexpected or planned) by allowing submission of a work order addendum throughout the process.  Generally,  here is a 24 hour approval process to the work order change, but the process is fairly simple and should not impede completion of the project.

Additionally, the borrower has the option of rolling any unused funds in the 10% to 20% contingency fund into the loan to reduce the principle balance at the time of the final draw on the project and/or submitting a final work change order to add further improvement to the property (landscaping, for instance).

The flexibility of the 203(k) program provides an opportunity for consumers to customize their home to their specifications without the high cost of custom construction and is a product that can help many agents and consumers in today's market.

Like Emmary I too couldn't even imagine life without my three fur babies.

As a long time, dedicated and devoted dog mama, I am just so saddened to hear of stories of pets that have been abandoned because of foreclosure or furry family members that have to be given up because families can no longer afford to keep them.

Any agency and/or service that is specifically geared to helping these poor creatures is a desperately needed service.  In an effort to promote the services of this wonderful organization, I would like to pass along this info to anyone who knows of any fur babies that are in need of a new home.

People are not the only ones losing their homes, lets do what we can to help the ones that can't help themselves.

Here is what buyers received in seller paid concessions on July 2010 Las Vegas Area (Henderson - N Las Vegas - Las Vegas) Closes:

• Less than $500:  67% ($500 only buys you a home warranty or (no and) an appraisal)
• Between $501-4000:  20%
• Over $4001:  13%

This pretty much means that sellers aren't giving up much of anything since Las Vegas is a Seller's Market and in dire need of sellable inventory!  Inventory levels are rising just slightly and we are seeing some movement/improvement in this sector which is good news, especially for buyers who want/need closing costs!

Last Month's Concession Stand

Most Current Concession Stand

What Areas Do You Cover for your Las Vegas Area Real Estate Market Reports?

General Las Vegas Area Real Estate Market Reports are for MLS Areas 101-605 (the average consumer probably asks, what’s that?)  It means that I cover the cities of Las Vegas, Henderson, North Las Vegas including unincorporated Clark County Townships of Whitney, Paradise, Winchester, Enterprise, Sunrise Manor & Spring Valley.  They do NOT cover the areas of Boulder City, Pahrump, Laughlin, Moapa or Mesquite.

View More FAQ About My Las Vegas Area Real Estate Market Reports.

The highway informational system gone wrong again?  There has been talk of blogging dying in the last year and now even so much as being dead now. Is this true? How can this be?  The internet is full of blog sites, people blogging left and right.

Teresa Boardman wrote this post the other day which was posted on Inman News : Agents killed the real estate blog - Now, I have met Teresa a few times, respect her, her opinions, and that she is a great blogger. But what she has stated, is this true?  An opinion that looks at a glass half empty?  Or a post that she actually disagrees about, but picked a topic because it's controversial, and that she just wanted to stir the hornet's nest some.  Not sure... but let's look at it from her perspective on what she had mentioned.

Here are two strong comments that Teresa stated that I disagree with.

"The real estate blog is largely dead." and "It had to die."

Here are some things that Teresa listed to why blogging has died. :

"The blog-type sites that have headlines from sites like this and others, and a lot of advertising, have been dead for years but they take almost no effort to maintain so their owners keep them going." - I agree, these sites take little or no effort.

"Many of the real estate blogs that are all about local events died before they were born." - I am semi confused. As a local expert, wouldn't you want to inform your local readers of the local activities and events in your area?

"The typical real estate blog has been dead for some time, but few are willing to make the proclamation. The Internet is littered with real estate blogs that get little traffic or that were abandoned years ago -- often within three or four months of their launch." - So what, be different than these other sites.  Focus about quality content.

"Those agents who post every listing they have, and nothing else, helped kill the real estate blog." - Okay, so this is the bloggers fault. Will a consumer follow them further?  Probably not, because they lack new stimulating content or post worthy information about a local area that is not talked about much.  Ask Erica Ramus about this. Schuylkill area - She lives and works in an unique area and has blogged about some specialties and some issues, that aren't found any where else on the net. She has garnered some excellent business because of this. Overall, these agents think this will make them money. But does it kill blogging?  Not in my opinion.  And Renee Burrows gets some very good business from her marketing reports. This might not work for all, but it works for her and because she does an excellent job with this.

Teresa did mention these things that I truly agree about. :

"Agents read a success story about a blog and try to replicate it, failing to realize that each area has its own culture, and that Realtors have their own personality and voice." - Amen... your blogging voice. You need to be original, yourself, and post quality content. Not hundred's of posts in a short time with bland information.

"Some real estate blogs are written for Realtors. I don't think those blogs will die." - I know many realtors that follow each other. Sometimes it's just a popularity thing and in many cases, these people are just that good with very good content and who supply interesting topics or thoughts.

"They are looking for information they can trust, in a sea of generic information." - Isn't this one of the main reasons to why we should blog?  I am passionate in what I do and I want to get the best possible information into the hands of borrowers and other like-minded professionals, but info that is not biased.

"The idea that a Realtor should be a local real estate market expert died in favor of the idea that a Realtor should make friends on the Internet and those friends will become clients." - I do think social marketing has it's place, but is over used and abused in the sense that the blog in some sense has died. To many people focus on short tweets that is based on fluff marketing of their name and or product, that they sell sell sell, yet they don't offer up useful information that is real. It's more of a numbers game to them.

"Some blogs died because their owners spent more time building and tweaking the blog than they did generating content. It is easier to build a blog than it is to write one." - This kind of goes back to social marketing and not true content or original content. I know some people that buy their material, yet they act like an expert. All they are doing is marketing someone elses material as their own, and as an expert. And some do it very well.

Conclusion : I could easily add another 500 words to this topic.  But I look at this glass as half full and not half empty. Keep this in mind, about 80 to 85% of the borrowers search online first. I think that the internet is way to powerful when it comes to it's searching power.  Are more than 50% of the blogs and posts out there crap, misleading, false, or just fluff?  Yes, I would say so.  Does this mean that blogging is dead?  No. Or is it dead because of how some use their blog?  Or that social media has taken over now. Such applications as Facebook, Twitter, Yelp, Foursquare, and a few others to name? No.. I think these applications are just quick fill-ins for those that want quick updates. But in my opinion, you can't get realistic information and or opinions by a quick post, a tweet, or because someone is a Mayor of a specific place.

BLOGGING is not DEAD - (my opinion) - It's how you get your information out there, the quality of your content and... I think if you come across very passionate and knowledgeable, that this is the key.

_____________________________________________________________________________________________________

                                                                                                           FOLLOW ME ON FACEBOOK

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- FHA Home Loans - Mortgages -

Experience & Knowledge at its BEST !!!

Follow me on:

_____________________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors

Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc

www.lasvegasmtg.com Report: Veterans are waging another war on the "Home Front" with slumping home prices in  Las Vegas and across this country when orders for reassignment comes. Veterans are concerned they have little options when they are being reassigned due to base closures or transfers. Their options are two house holds and splitting the family up, or renting out the property at $400 to $500 less then the mortgage payments, or the ultimate decision to let the home go to foreclosure, or Deed in Lieu of Foreclosure or a short sale.

The last resort, Foreclosure has a far more reaching impact then losing the Veterans "Certificate of Eligibility" due to the government loss that has to be paid to the lender when the house is foreclosed on. The loss has to be repaid back to the Veteran Administration before the Certificate of Eligibility" can be restored. A daunting task on military pay. VA requires a minimum of two years after a foreclosure before a new purchase but Fannie MAE guidelines are now two years for Short Sale, Pre-foreclosure, and five years after foreclosure unless proof of extenuating circumstances then it is three years.

If there is a short sale or foreclosure this will impact the veterans credit negatively and a credit check is required to determine security clearance for career military personal. This would eliminate any promotion and could decrease the Veterans rank and pay.

With an all voluntary military and the sacrifices that we ask of them, how can we allow this to happen and not provide a solution for them?

Well there is some relief even if it is a small one there was legislation in the stimulus package for $555 million to help the Veterans that are facing these tough choices. First it is estimated by the Army Corp of Engineering that only about 17,000 Veterans would be eligible for help. This program was designed to limit the amount of claims and funds to help the Veteran.

To be eligible Veteranshad to purchase the home prior to July 1, 2006. The funds would be used to pay up to 95% of the loss if the Veteran is forced to sell. The government could also acquire the title at 90% of loan amount or payoff the loan balance. The problem is that the remainder or difference of the 5% or the 10% loss would have to be restored before their Eligibility by the Veteran can be available again to them.

I ask you, do you feel that it is right for the Veterans to fight another battle on the "Home Front" while keeping our country safe? Please let me know.

                                                                                                          

John Le Francois Senior Loan Officer All Western Mortgage Inc. 8345 W. Sunset Rd. Suite 200 Las Vegas, NV, 89113 US	Work: 702-947-0648 Mobile: 702-271-2659 Fax: 702-541-9901 jlefrancois@awmlv.com http://www.lasvegasmtg.com
Visit MyBlogLog and get a signature like this!

FHA 203(k) Renovation Loan....Easily the Most Underused and Least Understood Mortgage Product Available

The opportunities for utilizing the FHA 203(k) program abound in the current market; however, there are very few consumers or agents taking advantage of the opportunity.  The reasons for the under utilization of the program expose a couple areas of misunderstanding:

1).   The 203(k) program has been in existence and available for consumers for well over twenty years.  However, there are very few lenders who offer the product and there are even fewer lenders and loan officers who know how to originate and process the program.

2).   Listing and selling agents are not familiar with the 203(k) program and, as in all of human nature, there is a tendency to avoid that which we do not know.  In preparation for this article I sent emails to as several real estate agents with the following questions:

A.     Have you ever worked with a buyer or seller utilizing the 203(k) program?

B.     As a listing agent, would you be inclined to accept an offer from a 203(k) borrower?

C.     As a selling agent, would you be comfortable with working with a consumer through the process of a 203(k) program?

Contrary to what I had heard from other loan officers, not one real estate agent objected to the use of the 203(k) program when representing either the seller or the buyer.  However, almost all of the agents questioned did not understand the program and readily admitted that they would have to be educated in the process prior to encouraging their sellers to accept an offer or working with buyers looking for a renovation project.

(Note:  Karen Fiddlerin Mission Viejo, CA is the only real estate agent I corresponded with who has first hand knowledge of the product and she specifically said the biggest challenge was in educating the listing agent about the product).

3).   Consumers are not aware of the program and options available to them because their loan officer and/or their agent have not provided them with thorough knowledge of the program.

The current market of undervalued homes, foreclosures and short sales provide a great opportunity for agents and consumers to create opportunities that would not exist with any other mortgage product.  The purpose of this series provide both agents and consumers with a overview of the 203(k) program, implementation and process of the obtaining a 203(k) loan, marketing the loan to sellers, buyers and refinancing consumers and creating a vision for showing all consumers how the 203(k) program could create instant equity in a purchase or refinance of a currently underwater home.

Part One:  Overview of the FHA 203(k) program

The 203(k) program is a renovation loan, available for either purchase or no cash out refinance of an existing home within the same loan amounts limits of traditional FHA loans.  The program allows for minimal (as low as $5,000.00) cosmetic work, including replacement of appliances as well as a complete rebuild or renovation of an existing property (limited to using at least a portion of the existing foundation).

The loan amount is based upon an appraisal of the specified work to be completed (future value of the home) and allows for an escrow/impound account of up to six months complete housing payment if the house is uninhabitable during the renovation.  Final loan amount may be up to 103% of the future value as provided by the appraisal. (NOTE:  Actual FHA guidelines allow for loan to values up to 110%, however, lender overlays have reduced this amount to 103%).

There are two versions of the 203(k) program:  A streamlined (up to 35K) and a full 203(k).  Currently, investors have balked at the advance deposit on the streamline process and have pulled back from offering this version; therefore, only information of the full 203(k) will be presented in this series.

Underwriting Guidelines Summarized

•      Owner occupied, 1 to 4 unit properties, SFR, condo and PUD
•      HUD/Bank Repos
•      Existing homes complete for one year
•      New construction on part of original foundation
•      Existing home moved to new foundation
•      Structural alterations and additions
•      Remodeling kitchens and bathrooms
•      Changes to eliminate obsolescence and reduce maintenance
•      Modernize plumbing, heating, AC and electrical systems
•      Energy efficient improvements
•      Install or repair well or septic systems
•      Roofs, gutters and downspouts
•      New free standing appliances
•      Interior and exterior painting
•      Flooring, carpeting and tile
•      Swimming pool repairs (NO new pools, spas or luxury items)
•      Other improvements that are a regular part of real estate

Rates competitive to traditional FHA loans

Fully assumable thirty year fixed rates

29/41 Ratios

Traditional FHA credit and income qualifying guidelines

30 day closingss possible

660 credit score required

General Contractor required (home owner may work as sub for GC)

Up to 6 months PITI and monthly MIP rolled into the loan

Next installment will list the process flow for agents and consumers through the underwriting and renovation process.

Mountain's Edge July 2010 Real Estate Resale Market Report:

• Listings (8/15/2010):  277
• Under Contract (8/15/2010):  314
• Sold July 2010:  62

Since Last Month:  Listings are UP +28, Pendings are DOWN -11, Sales are DOWN -26

Last Month's Mountain's Edge Market Report

View Mountain's Edge Homes For Sale Here (Updated Daily)

More Information on Mountain's Edge Real Estate Here

More Las Vegas Communities Here

The President officially signed Bill H.R. 5981 on August 11th, 2010 which became public law.  I wrote about the actual changes to FHA loans and how it will affect borrowers as of October 4th, 2010.  Please read :  Bill H.R. 5981 passes - FHA Mortgages to increase it's annual mortgage insurance premium 

There has been a main problem in regards to the information being supplied since this bill was passed by the Senate, which was on August 4th, 2010. I have read several blogs out on the internet both by AR members and the news media stating that the monthly mortgage increase has been raised to 1.55 basis points. This is correct and incorrect. Read below...

The following summary below was written by the Congressional Research Service.

Yes, congress passed the monthly mortgage insurance to 1.55 basis points.  But this is a cap and not the actual amount that FHA is prepared to use on all FHA loans for now.  The new monthly mortgage insurance rates will be either .85 or .90 basis points, all depending on the amount of your down payment., which I explained in this post. FHA Mortgages monthly mortgage insurance changes - effective October 4th, 2010 -

But if you read some of these other posts, they don't explain it this way. Some give examples of the mortgage payments of like $167 more a month on a $200,000 mortgage, which is based on 1.55 basis points. If you actually use .90 basis points, that mortgage payment now increases only to $59 more a month.  Sorry folks, but that is a huge and misleading difference of $108 a month and could scare possible buyers away if not properly educated about this new change for FHA loans.

Keep in mind though, FHA will not need the approval from Congress to ever change these rates as long as they don't exceed 1.55%. 

Another thing, HUD has not released a FHA mortgagee letter as of yet. But FHA did announce this as a press release with a FHA letter.  FHA Mortgages - change in mortgage insurance  Any and all FHA case numbers assigned on and or after October 4th, 2010 will be subject to these new changes.

3 quick examples :(both examples are putting the minimum down payment of 3.5%)

• On a $275,000 mortgage - the change in payment would be about $70 higher a month

• On a $200,000 mortgage - the change in payment would be about $45 higher a month
  

• On a $125,000 mortgage - the change in payment would be about $27 higher a month
  

These FHA Loan changes are the same, no matter what state you reside in.

_____________________________________________________________________________________________________

                                                                                                           FOLLOW ME ON FACEBOOK

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- FHA Home Loans - Mortgages -

Experience & Knowledge at its BEST !!!

Follow me on:

_____________________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors

Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc

Get real!  Why would I want to have an agent act as a middleman when I can deal with the builder?  I can get the house for less because there will be no commission to pay. Why should I lose thousands of dollars just to have you walk in with me? If you are a home buyer how often have you thought this?  If you're a Realtor how often have you heard this?

When the cat is away the mice will play.  There are so many things that can work against a home buyer when they aren't properly represented. Check out  the latest scandal by some home builders.  No agent to review your paperwork and you aren't an attorney or well versed in deciphering a harmful clause in a real estate contract.  Glad I'm not you.

People will pay legal fees to protect themselves in a small civil case but think they can "wing it" on their own when buying a structure costing hundreds of thousands of dollars. As I recall a lot of people were taken advantage of by builders.  For example, everyone in the real estate community in Sacramento knew to steer clear of this company.  These unlucky home buyers who went at it alone ended up with a huge mess on their hands. A mortgage on a home they couldn't occupy.

Don't think this is an isolated incident.  Visit www.ripoffreport.com and type in your favorite builder and see what pulls up.  Most complaints are made by buyers who were not represented by an agent.  To further drive my point home, how many of you reading this post think oversight of mortgage lenders and investment people is a good idea?  Who is going to oversee your new home purchase?  The agent who is paid by the builder?  Uh huh, you catch my drift.

You're not  hiring a person who lets you look at the inside of houses or a shuttle driver.  You're hiring a professional who's little subtle re directions during the transaction helps you avoid disasters.  You think it was a great idea and we know it was more than that.  It saved you from a lawsuit.  These lawsuits aren't always contractual either.  Many can fall into the form of discrimination.  Some blatant most subtle.  I didn't know is no excuse in a courtroom.

Even if your theory of a home being sold for more holds true, hiring a Realtor to represent you in a purchase of a new home is much cheaper than the potential mounting legal bills or paying for a home you can't even occupy.  Agents know contracts, federal and local laws, have the inside scoop on bad and good builders and always stay abreast of breaking news that could affect the area you are buying in or the credibility of the builder.  If the builder thinks they can pull a fast one on you to make more money, then there's a good chance they might.

So you have a million dollars burning a hole in your pocket and you want to buy Las Vegas Real Estate!?!?

Well here you have it!  All of these Links are Updated DAILY with the newest listings!

Here is what you can buy today in Las Vegas for $1 Million Dollars (give or take $100K!)

OK OK so you have champagne tastes and a beer budget.  Let me show you what you can buy today in Las Vegas for $500K (give or take $50K!)

Let’s just say you are a big baller and you choose to be pampered with the best of everything in life – you need total luxury, views, privacy and amenities.  Take a peek at Las Vegas’ most expensive listings right here!

See, there is a little something for everyone

PS:  Don't forget these links never expire so you may want to bookmark this posts as the links to Las Vegas Luxury homes for sale and listings are updated DAILY!

Shop till you drop - this might not be wise advice when shopping for a mortgage

I wanted to bring up this topic because it still happens more than it should. I know we all want the best deals, but anyone can make general promises on the phone or on paper.

Shopping for a mortgage in New Jersey is not easy and it's not like shopping for a car. A car is a car, but ones service could be better.  And one could argue that most mortgage companies should have the same interest rates and mortgage programs. But there are way to many unknowns upfront that can change interest rates. In my opinion, those that don't want to ask all of the appropriate questions upfront and educate you about the different types of programs, generally just want to get you in the door and then worry about everything later.  Yes people, this still happens, even after several changes in the last year that try and protect the consumer when applying for a mortgage.

I read this comment from a realtor -  "I tell my clients to shop loans and make sure the lenders provide the information about costs and fees associated with the loan.  I think that is a service to my buyers."

I am sorry, but this kind of statement is like pointing a gun at your head that holds 6 bullets, yet 3 bullets are loaded. Your chances of being shot are 50%. Just like when shopping with to many lenders, that it could increase your odds of not getting the right information or misleading information and rates/fees.

Here are two quick stories -

1.  I had a realtor that decided to give me a chance, yet she told me that she had 2 very good loan officers that she recommends all of the time because they were excellent and that they closed her deals. After speaking to this borrower, who already spoke to the other 2 loan officers, I realized that this borrower was never explained on how adjustable rates worked.  Yet he was sold on an adjustable rate, because the rate itself was very attractive.  The funny thing was that I was about 1/4 percent cheaper in interest rate and $1,000 cheaper in points on the fixed rate. But on the 5 yr arm, this lender was beating me out by 3/8 of a percent. He chose the loan officer with the lower rate, even though he thanked me for educating him on adjustable rates, going over his goals (which neither loan officer did), and just for the fact that I taught him about refinancing in the future. See, he was under the impression with FHA loans that if he refinanced 4 years later, as long as he had 20% or more equity, that he wouldn't have monthly mortgage insurance. This is 100% false on FHA loans. But see, I went into great details, knowing what he was trying to accomplish in the future, and because we went over his goals. Yet this was never talkied about by the other two loan officers.

End Result - 1 day after he applied with this lender, rates began to drop. By the end of the week, I was barely 1/8 of a percent higher in rate, yet this other loan officer never offered a lower rate since rates dropped. Yes, many loan officers/lenders can offer you good rates and such, but at what price to the borrower. And sometimes these costs could add up as future costs and not as present costs, hence why goals are important. And in my opinion, this realtor really wanted to give out 3 names just to protect herself. If you really trust one person, there is no need for 2 other names.

2.  A person that I have know for 3 years has said all along that I was his guy.  He trusted me and such. I have done over 5 pre-qual letters for him in the last 4 months. Well, that turned quickly and he ended up using another loan officer that his realtor pushed, because the other lender made it look like I wasn't doing my job. He told the borrower that we didn't order the appraisal as of yet and his total costs were $800 cheaper than me. I tried to explain that I always try to be on the high side. Besides, I had no lender fees, so I knew this couldn't be true.  Also, the loan officer had offered a lower rate after I told the realtor what I was giving the borrower.  But wait, the borrower was floating and I wanted to surprise my so-called friend later on with a lower rate. 

The end result? I could have given this borrower a 1/4% less in rate.  And wait, just yesterday he was told that he needs $400 more at closing tomorrow for escrows.  hhhhmmm - Who lost here?  We both did. But I just called this person and told him to fight it at closing tomorrow, because the lender didn't disclose the new update 3 days prior to closing. He was appreciative, even though he went some where else.

Conclusion - All the reason why shopping for mortgages in New Jersey with many lenders could backfire on you or just hurt you overall.  I wrote a series about this. So who do I trust?

• TRUST - Find a trusted realtor or loan officer - Who defines trust ???

• Would you rather work with a Marketing Guru or a Real Professional?

• To be an EXPERT or not, what is thy question?
  

• What is Transparency?? Best Mortgage Rates/Online services/Real Estate Services - (Part 1 of 2)

• Transparency in Real Estate/Mortgages - Interview your Realtor or Loan Officer - (Part 2 of 2)

Some important reading - Some changes in the last 12 months by the government, trying to protect the consumer when it comes to shopping for mortgages. But has it really helped as much?

• The MDIA - The Mortgage Disclosure Information Act - Effective July 30th, 2009

• Good Faith Estimates Explained - FHA Loan Good Faith Estimates - Understanding the whole process - Part 1 of 2

• Good Faith Estimates Explained - Changes for the WORST - Detailed changes - Part 2 of 2

- I wrote about this same topic on October 25th, 2006 -

• Shoppers that shop themselves right out of the market……

_____________________________________________________________________________________________________

                                                                                                           FOLLOW ME ON FACEBOOK

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- FHA Home Loans - Mortgages -

Experience & Knowledge at its BEST !!!

Follow me on:

_____________________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors

Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc

Charleston Heights July 2010 Real Estate Resale Market Report:

• Listings (8/15/2010):  129
  
• Under Contract (8/15/2010): 136
• Sold July 2010:  51
  

Since Last Month:  Listings are UP +20 units, Pendings are DOWN -20 units, Solds are UP +13 units.

Last Month's Charleston Heights Real Estate Market Report

For More Las Vegas Communities and Reports Click Here

Coronado Ranch July 2010 Real Estate Resale Market Report (Homes For Sale/Pending/Sold):

• Listings (8/15/2010):  26
  
• Under Contract (8/15/2010):  42
  
• Sold July 2010:  7

Since Last Month:  Listings are UP +3, Pendings are UP +2, Solds Units are DOWN -1.

Last Month's Coronado Ranch Market Report

View Coronado Ranch Homes For Sale Here (Updated Daily)

More Information on Coronado Ranch Real Estate Here

More Las Vegas Communities Here

Some home builders are including in their contracts a 1% fee to be paid to them every time the house is sold  for up to 99 years.  The money is nothing more than profit for the builder and is not used for up keep or any type of property improvements.  Lenders are getting keen to this and reviewing contracts very carefully looking for this clause.

If the lender sees this clause in the contract they will likely deny the buyers home loan.  Lenders will be on the hook to try to sell a home with an additional 1% fee everytime the property is sold making it harder to sell in a case of default.  Anything that adds a layer of risk will either cause the lender to adjust the interest rate to reflect that risk or they will simply deny the loan altogether.

Just when a Realtor thought their job was hard enough.  Now you will want to comb through these builder contracts very carefully before assisting your buyer through the process.  I would even recommend a full underwriting approval on all new construction homes to protect your buyer form a possible loan denial.  If the underwriter reviews the contract and the buyers qualifications and approves the file then you would have significantly reduced the likelihood of problems.

If you are in the states of WA, OR, CA or NC we will gladly package a loan without a property address and submit it for underwriting allowing you the peace of mind that the loan shouldn't become an issue. E MAIL or (888) 206-5781 Otherwise ask your favorite trusted lender to do the same. Of course one could take the simpler approach and focus mainly on existing homes.

READ THE ARTICLE

I had a chit chat with a nice out of state all cash investor today.  She has been led to believe that she can flip homes in this environment.  Resale homes that is.

She has been looking for several months as I understand and she had been given some poor advise.

I wasn't willing to take her on!

WHY?

Right now Las Vegas area listings are increasing with a rapid pace due to the first time buyer tax credit.  "Sellable" inventory has increased also.  I was right in my January article - the investors have been left holding the bag as I watch their overpriced inventory gather dust. 

This stuff would have been snatched up in a New York Minute back in April (tax credit buyers) but with calculated price reductions by bank asset managers now it just seems to stand out like a sore thumb.

Even the true flippers (the ones that purchase at the actual foreclosure/trustee sale) are stating that their margins are tight these days.

I would never, in our volatile Las Vegas real estate environment advise someone that doing this is a walk in the park without checking with the customer/client to make sure they have the stomach & means to hold the property in the event of another decline (which could happen!)

Maybe this is my odd combo of altruistic/narcissistic side  of me that assumes I will get a sale and then consequently a listing.  Who needs another person pissed off at you because you can't sell their house at the margin they expect?  Not even the best marketing machine in the world could do it..........in this environment.

It is possible to do this, just not highly probable to see the results you want.

You can see my Las Vegas Market Report Graphs right here if you don't believe me.

Henderson NV Back to School Home Sale!

Clark County Classes (Henderson NV) will be starting on Monday August 30, 2010.  In celebration I am having a back to school home sale with details following some helpful Clark County School District Links:

• Clark County School District's Main Page
• Zoning Information - see boundary maps and search by address (note:  these change frequently so be sure to check each school year!
• Enrollment Information
• Accountability Report (good stuff in here!)
• School Calendar (breaks, holidays, teacher staff days, etc) 

JUICY HENDERSON REAL ESTATE OFFER:

Buy a home through me or any of my associates and you PAY ZERO file management/transaction/doc brokerage fees PLUS a home warranty (of your choice) up to $600 in value*

*THE CATCH (terms and conditions):

• Final home must be sold for $250,000 or more (no exceptions even if final sale price is $249,999)
• You must be fully approved (financed) or proofed (all cash) for an appointment to be made
• Home warranty must be disclosed and APPROVED by all parties involved in the transaction (seller, listing agent, title, your lender)
• You must have a fully executed contract by October 15, 2010 and close by January 15, 2011
• Short sales are excluded from this offer (there is plenty of REO, New Construction, Trustee Sale Flips and NORMAL inventory in this price point)

Mention "HENDERSON BACK TO SCHOOL HOME SALE" to get the ball rolling when you email or call!

Search for HENDERSON HOMES FOR SALE ABOVE $250K NOW!