Archwood Properties

Not along ago, few people had even heard of a short sale, which occurs when the bank agrees to discount the loan balance for a seller who owes more on his mortgage than the home is currently worth.

If you’re in the market for a home today, you’re almost guaranteed to be looking at some short sales. Nationwide, 14% of homeowners are currently underwater on their mortgages. And in many areas, it’s far more.  The good news is that short sellers are likely to still be living in the home and some may even be current on their payments. That means these aren’t the run-down, distressed properties that you often find among foreclosures; in fact, there’s a good chance that some of the most deluxe homes for sale in your market are underwater.

One important aspect to remember about short sales is that they are not in fact short. For the sale to go through, the seller’s lender must approve the price and agree to take the shortfall as a loss. That extra step can cause the process to drag on three times as long as a normal home sale, but the hassles can definitely be well worth the wait.  Some buyers and realtors don’t want to deal with short sales, leaving many choice homes with very few bidders. So if you’re willing to brave the intricacies of the process, you’ll be far more likely to land the home you always wanted. The key to snagging a good deal is knowing how to avoid the land mines.

Know what you’re getting into.

In a short sale, you are dealing with several parties: the sellers, their agent and the sellers’ lender. That’s why a short sale can take anywhere between two and six months to execute, compared with about 30 days for a typical sale. Though many banks are willing to take a loss on a mortgage in a short sale if it means avoiding an even bigger loss in a foreclosure, with so many owners trying to unload properties, the lender’s negotiators are flooded with short-sale offers. So if you’re moving or selling another property, keep in mind that you’ll likely need to budget for a few months’ worth of rental payments so you have somewhere to live in the interim.

Find the right pro.

Lenders often make realtors who work on short sales take a hit on their commission, so some brokers may be loath to show you the listings. But don’t even think about going solo, these deals take a lot of work and persistence. Before you sign up with an agent, ask him how many short sales he’s closed. If he hasn’t done at least two, find someone more experienced.

Weed out candidates.

In most cities, home listings will indicate in the description whether the property is a short sale. Ideally, you want to knock off ones that come with extra complexities. If possible, pass on any home that has more than one lien against it; having to negotiate loans with two lenders can greatly increase the amount of time it takes to complete the deal. Also avoid homes where the seller has other offers. That’s because if another offer is pending, the seller’s agent isn’t likely to even submit yours for approval until the first one is rejected, meaning you’ll have to wait for another negotiation to play out before you even get a chance.

Set the right price.

The first step is to have your agent submit your offer to the seller. Don’t just rely on the current list price to come up with your initial bid. The seller’s agent may have far underpriced it in hopes of attracting buyers, but the bank likely won’t accept a lowball offer. Ask your agent to determine the home’s fair market value by searching comparable sales in the area, with an emphasis on other short sales and foreclosures. If the fair market value is lower than the list price, set your offer 10% lower than that.

At this point, you’ll also want to get pre-approval for a mortgage; many banks won’t even consider your offer if you don’t have one.

Protect yourself.

Next, the seller’s agent will submit your offer to the seller’s lender. At this point, you’ll be asked to sign a sales contract. See if the lender will agree to pick up all closing costs as part of the contract. Also ask your realtor to specify that you won’t do an appraisal or inspection of the property until the offer is approved. That way you won’t have to shell out hundreds of dollars until you know you realistically have a good chance of getting the home.

Finally, though most lenders will require you to make some kind of deposit along with the contract, don’t put down more than $3,000 before your bid is accepted. That will give you room to put offers on other homes or even to pull out of the sale if it drags on for too long.

Be a pain in the neck.

 After your offer is submitted to the lender, you’re likely to hear nothing for weeks, if not months. This is no time to relax. Call your agent at least once a week, and make sure the seller’s agent is contacting the bank’s negotiator nearly every day.

Keep your eye on the market.

When the bank finally sends its counter-offer, use it as a guideline rather than an ultimatum. Most of the time, the lender’s number is based on its own research, that of a local realtor it hires and the outstanding loan balance. Usually its goal is to sell for at least 90% of the home’s value.

The lender’s offer may not be what you’d hoped for, but don’t despair: You have a chance to counter. If the market has been flat since your initial bid, try for 5% to 10% less than the bank’s number. If the market has been sinking rapidly, however, you may be able to prove that the home’s value has shrunk further and offer even less. Once you have the lender’s ear, the new offer should take less time to process.

For more information, view the entire article: Snag a Great Deal on a Short Sale by Joe Light.

Contact us today! info@archwoodproperties.com or 214.923.0261

The time is definitely right for many first-time home buyers, however you should not forget to include these costs into your budget. 

Cost #1: Getting ready
Start the process by polishing your credit report. While the cost can be relatively minor, it’s particularly important now that banks are being more selective about making loans. Half of U.S. banks tightened lending standards on prime mortgages in the previous months.  A higher FICO score also gives you greater negotiating power over the terms of the mortgage and ultimately, the total cost of the loan. A stellar score ranges from 760 to 850, while scores below 640 might mean you have to pay a significantly higher interest rate.

Cost #2: Down payment
Rates on 30-year fixed mortgages are at a record low of 4.78 percent. At the same time, more lenders are demanding bigger down payments of 20 percent or more.  The upside of making a bigger down payment, of course, is that you’ll owe less money and get better terms on your mortgage. If your down payment is less than 20 percent, however, you generally need to pay for mortgage insurance. This could cost $100 or more a month depending on the nature of your loan.  You can find out the down payment your lender will require as part of the pre-approval process. This is typically a free service where a lender evaluates your financial situation and tells you the terms of the loan they’re willing to give you. It’s a good idea to get pre-approval before you start looking at houses.

Cost #3: Adding up fees
New fees introduced by Fannie Mae and Freddie Mac in the past year will likely push the price of a mortgage higher for many people.  The fees are based on credit profiles, the amount of the loan in relation to property value and the type of home you’re buying. As such, they’ll vary greatly depending on your personal situation, but could total as much as 3 percent of the mortgage.  There are also standard closing costs to consider. These are service fees charged by the lender, and could cover items such as credit reports, appraisals, documentation and administrative costs.  The total expense will vary depending on where you live and your particular situation.

Cost #4: Inspections
There are plenty of inspections to consider.  Your spection costs will depend on the checks you want and whether your inspector offers comprehensive packages.  The seller might pay for inspections in some cases, but it’s more common for the buyer to foot the bill.

Cost #5: Maintenence
A common mistake for many new home buyers is focusing on the monthly mortgage alone. It’s easy to forget all the maintenance costs that come with owning a home. To start, your utility costs will likely go up significantly. As a renter, you might not even pay for water, heat or electricity. But they could be a big drain if your home is large or you have a pool or other feature that drives up utility bills. There are bigger maintenance matters to consider as well, such as repainting the house periodically. You’ll also be on the hook for any repairs for your home.

Minimize the headache of buying and selling your real estate property by working with an educated Realtor, who can guide you through the entire process and answer any questions you may have.  While there are plenty of experienced and qualified Realtors in your area, only a small percentage of them are EcoBroker-Certified. As an Ecrobroker, not only do we care about our clients, but also about the environment, and want to promote energy-efficient and ‘green’ features in your home.

BENEFITS OF BUYING YOUR HOME THROUGH A REALTOR

1. Your Realtor can help you determine your buying power. 
Your buying power is your financial reserves plus your borrowing capacity. Giving us a few pieces of key information, such as your available savings, income and current debt, we will be able to refer you to lenders best qualified to help you. We will also be able to assist you in understanding the different financing options available from each lender.

Take it a step further!
Ecobrokers have an understanding of energy efficiency and the costs or savings associated with insulation, windows, appliances, heating and cooling systems, and other features of a home that will affect your monthly budget and how much you can afford.

2. Your Realtor has many resources to assist you in your home search.
Sometimes the property you are seeking is available, but not advertised in the market. With our tools, we will be able to investigate and provide you with a complete list of available properties.

Take it a step further!
As Ecobrokers, we will be able to provide you with a listing of homes with specific, new ‘green’ features.

3. Your Realtor can assist you in the selection process by providing objective information about each property.
We have plenty of access to a variety of informational resources, that are not accessible by the general public. We have the ability to provide you with information utilities, zoning, schools, etc. Two things you’ll want to know when searching for the ideal property: Will the property provide the environment I want for a home or investment? and Will the property have resale value when I am ready to sell?

4. Your Realtor can help you negotiate.
There are a myriad of negotiating factors, including but not limited to: price, financing, terms, date of possession and often the inclusion or exclusion of repairs, furnishings and equipment. The purchase agreement should often provide a period of time for you to complete the appropriate inspections and investigations of the property before you are bound to complete the purchase. We will be able to advice you on which investigations and inspections are recommended and required.

5. Your Realtor provides due diligence during the evaluation of the property.
Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. We can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of the property and can be mired in confusing status of past owners and rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. We can help you resolve any issues that might cause problems at a later date.

Take it a step further!
As Ecobrokers, we can help you address environmental issues including: indoor air quality, ventilation, use of low VOC paints, quality radon testing and reliable water testing.

6. Your Realtor can guide you through the closing process and make sure everything flows together smoothly.

BENEFITS OF SELLING YOUR HOME THROUGH A REALTOR

1. Your Realtor can give you up-to-date information on what is happening in the marketplace.
Key factors of the current marketplace are prices, financing, terms and the condition of competing properties, which will lead to having your property sold at the best price, in a timely manner and with minimum hassle.

2. Your Realtor markets your property to other real estate agents and the public.
In many markets across the country, 50% of real estates sales are cooperative sales. Cooperative salesis when another agent then your selling agent brings in the buyer. We, as your selling agent, act as the marketing coordinator; disbursing information about your property to other real estate agents through a Multiple Listing Service (MLS) or other cooperative marketing networks and open houses for other agents. Additionally, we will often recommend repairs or cosmetic work that will significantly enhance the salability of your property. 

 Take it a step further!
As Ecobrokers, we understand energy efficiency and environmental features of homes. Working with us ensures you are working with someone who can highlight energy-efficient and healthy indoor environment features of your home.

3. Your Realtor will know when, where and how to advertise your property.
There is a misconception that advertising sells real estate. Studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When we market your property, we don’t necessarily have to bring strangers into your home. We are very familiar with our network, and if we don’t know a prospective buyer, will pre-screen and accompany them through your property.

4. Your Realtor can help you objectively evaluate every buyer’s proposal without compromising your marketing position.
This initial agreement is only the beginning of a process of appraisals, inspections and financing — a lot of possible pitfalls. We can help you write a legally binding, win-win agreement that will be more likely to make it through the process.

5. Your Realtor can help close the sale of your home.
Between the initial sales agreement and closing (or settlement,) questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. We are the best people to objectively help you resolve these issues and move the transaction to closing.

Before attempting the tedious task of buying or selling a property on your own, take a moment to discuss the market and other matters with one of our Ecobroker-Certified Real Estate Agents. 

As everyone knows tough economic times are upon us, and it doesn’t look like it will change any time soon.  This is mainly due to the housing crash caused by sub-prime mortgages.  A crash that has caused the credit markets to tighten up, and has made qualifying for an affordable mortgage much harder.  Perspective home-buyers are now sitting on the fence, because they can’t afford the higher down payments lenders are requiring.  One way around this is getting qualified for an FHA loan, a loan that is insured by the government.  FHA loans are beneficial because you can normally get approved for a home mortgage with  a minimum of 3.5%  down.  Approval is determined by an individuals credit score and other income factors.  Please contact a mortgage broker or your financial institution on obtaining a FHA loan.  

Call Archwood Properties at 214-923-0261 with any real estate questions in the DFW area.

Follow the link below for a story on FHA loans by Les Christie a staff writer for CNNMoney.com.

http://money.cnn.com/2009/01/15/real_estate/low_down_loans/index.htm?postversion=2009012006. 

According to the PMI’s new home risk price study, shows that Dallas, Plano, Irving, Arlington, and Fort Worth homes have less than a 1% chance to drop in value within the next two years.  For more info, please follow this link http://www.dallasnews.com/sharedcontent/dws/bus/stories/100208dnbuspmi.cd7bb689.html  to the article on The Dallas Morning News website.

If this study turns out to be true many of today’s homeowner’s can look forward to a brighter future.  Also, many buyer’s in the market should see this as another positive reason why now is the time to buy.  With home prices being lower than average and foreclosures at all time highs, it would be a great opportunity for someone to purchase a home if there’s is a 1% chance that there home will decrease in value. 

If you are looking to purchase a home please contact an Archwood Properties agent by phone at 214-505-9420 or by mail at info@archwoodproperties.com 

As you may know, the government now has taken control over Fannie Mae and Freddie Mac.  Fannie Mae and Freddie Mac guaranteed or owned over half of the mortgage loans issued in the financial market.  With their reoccurring loses in the billions and no sign of a fast mortgage market turn around, the government had to step in and take over.  As a result, investing in mortgage back securities went up and mortgage rates have gone down.  Who is this benefiting?  Well it’s benefiting current home buyer’s with lower rates, and it’s providing perspective buyer’s with confidence to go out and buy there dream home. 

For the full story and more go the Dallas Morning News at http://hosted.ap.org/dynamic/stories/M/MORTGAGE_GIANTS_CRISISSITE=TXDAM&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2008-09-08-12-35-17. 

 If your are looking to buy or sell a home please contact Archwood Properties at 214-505-9420 or by mail at info@archwoodproperties.com.

Thinking about buying a home?  Don’t know if the time is right.  Well, maybe a $7,500 tax credit will give you an incentive to buy.  Combine this with lowering mortgage rates, and there should be no reason for someone to purchase a home.   For more information on the new tax credit please go to the National Association of Home Builders website at http://federalhousingtaxcredit.com/.

If you have any questions on the new tax credit or any other real estate news please contact Archwood Properties at 214-923-0261 or by mail at info@arcwoodproperties.com.

Have you noticed the new developments at the intersection of Stacy and Interstate 75 in Fairview and Allen?  Many people are wondering what is going on?  Well, a billion dollar project of retail, residential, office, and hotel space is going on.  The project known as the Villages of Allen and Fairview, will bring millions of dollars of extra revenue and thousands of new jobs into each city.  This is a big plus to local homeowners, because it will allow them to shop, eat, and relax close to home without traveling to surrounding cities.  Allen and Fairview are some of the fastest growing cities in Texas, due to their reputable school districts and lower crime rates.  As a resident of Allen for over 4 years, I’m happy to see this new transformation.  I will be looking forward to the new restuarants and retailers in the area.  Also, there will be a mix of green spaces incorporated into the project to make it feel more eco-friendly.  The full article can be found on the Dallas Morning News website at http://www.dallasnews.com/sharedcontent/dws/bus/industries/commrealestate/stories/DNvillage_22cre.ART.State.Edition1.4e8463d.html.

For more information on the Allen and Fairview areas please contact us at 214-505-9420 or email us at info@archwoodproperties.com.