Tuesday, October 26, 2010

OCTOBER - 2010 Newsletter by Brenda Sanders

Welcome to the most current Housing Trends eNewsletter. This eNewsletter is specially designed for you, with national and local housing information that you may find useful whether you’re in the market for a home, thinking about selling your home, or just interested in homeowner issues in general.

Please click on this link to view the OCTOBER - 2010 Newsletter Housing Trends eNewsletter:

The Housing Trends eNewsletter contains the latest information from the National Association of REALTORS®, the U.S. Census Bureau, Realtor.org reports and other sources.

It also includes press releases with charts and videos, key market indicators and real estate sales and price statistics, a video message by a nationally recognized economist, maps, mortgage rates and calculators, consumer articles, plus local neighborhood information and more.

If you are interested in determining the value of your home, click the “Home Evaluator” link for a free evaluation report:

Sound decisions can only be made with accurate and reliable information, and I am happy to be a trusted resource for you. Thank you for the opportunity to provide you with this monthly eNewsletter, and I look forward to answering any questions you may have and to the opportunity to be your REALTOR® in the future.
Sincerely yours,

Brenda Sanders
 Hill Realty
 508 SW Wyoming Blvd Mills 
 WY 82644
 307-215-9077 | 307-267-0687

Monday, October 25, 2010

So you think you want a Fixer-Upper?

I know it has been a while since I last posted.  Been a very hectic couple of weeks.  Sometimes I think I just try to do too much at one time.  There is only so much a person can do when they multi-task.  The good news is that I am making head way on most of my endeavors!

I've been out showing a few houses and I've gotten a lot of inquiries into foreclosed homes or fixer-uppers so I thought I would explain a few things.  Many of these things are asked by my clients and therefore fuel for my blogs.  First of all, lets start with foreclosures.  There are few of these on the market these days.  We call these "bank-owned" homes.  Many of these have been abandoned by the previous homeowners long before they are put back on the market.  Most lenders will have the properties winterized and somewhat maintained during the listing periods however, the problem comes in the timing.  When a home goes into the foreclosure process, the homeowner is notified of the intent to foreclose.  The homeowner then has a certain period of time to pay the loan off or it goes to sale.  Once it has sold at auction, the homeowner still has a ninety day redemption period and a hundred and twenty days if there is another lien on the property.  This means he can stay in the home during this time.  Most homeowners leave during this period.  The lender cannot technically go in and do anything to the home until the redemption period is up and this can lead to problems within the home, especially if it is in the wintertime.

Because many homeowners have given up all hope in keeping the home, sometimes they literally take everything including the kitchen sink.  I've even seen some homes where the owners had taken the copper pipes to sell for scrap.  Sometimes, they have no funds to keep the house maintained and have let problems within the home escalate to become very costly repairs.  I have also seen where homeowners have not cared at all about the home and have torn up the walls, stairs, and appliances up.

Lenders are already at a loss on most of these and therefore will not put a whole lot back into the home.  They usually will try and sell it "as-is" after they get an appraisal on the home.  These homes will appraise for much less due to their condition, thus the GREAT buys for investors who can fix them up and re-sell them.  Not so great a buy for a first time homeowner however, unless they want to do a rehabilitation loan to fix them up.  And then, the loan amount is increased to cover the repairs and they are back up to where an average home is selling for.  So is a fixer-upper a good thing?  Not necessarily.

So let's talk about rehabilitation loans.  There are couple of different ways you can go with this. WCDA offers their Spruce Up program that allows the homeowner to borrow enough money to bring the home to good condition on top of the purchase price.  Before you can get this loan, a prospective lender would need to get an "as-repaired" appraisal to determine what the minimum requirements would be and then the buyer would need to get estimates from contractors for the work to be completed.  The minimum work would be $5,000 and $15,000 for the Spruce Up II program.  This program is the same as the FHA 203(k) program however is subject to income and purchase price limitations.  The 203(k) program is not.  Both are great rehabilitation programs for someone wanting to invest the time and work to fix up a home.

The one thing you must keep in mind is that a lender will not lend on a property that is not in average to good condition.  They will want the property to meet certain standards, therefore not all fixer-uppers are eligible for financing unless repaired.  What are the minimum standards for a lender?  They have to be in livable condition.  In other words, if the bathroom is not functional or the kitchen is tore apart, they will want it completed or repaired BEFORE closing unless you do the rehabilitation program.  They will not want chipped or peeling paint, the roof will need to be in average to good condition (no leaks), wiring and plumbing will need to be in good shape, just to name a few.  That's right...you are getting the idea.  If you don't want to live in it yet, it is probably not finance-able.  Even if you think you can live in it, you'd better check with your lender before making an offer.  Let them know what the condition is and they will let you know what needs to be done.  Get inspections!  I cannot stress this enough.  Get inspections!  An inspector will tell you up front what is not working and what might need repaired.

So does this mean that a fixer-upper is not a good deal?  If you have a good down payment and can get financing, the fixer-upper property might be a GREAT deal, especially if you can do a lot of the work yourself.  You will not find a low to NO downpayment loan for a fixer-upper except for the rehabilitation loans.

Call me if you have any questions on this.  We have several properties on the market that could use a good repairman.  In the meantime, enjoy this wonderful fall weather *sarcastic* (I know it snowed, sleeted, hailed and rained today).  My dauchsies are sure enjoying staying nice and warm next to me!

Tuesday, October 5, 2010

Is there an expense if I put an offer in on a house like an inspection and all that?

I know I got a little long winded yesterday so today I will try to keep it shorter.  I know that a lot of people have asked for this information so rather than post it directly back to them, I thought I would post it on a blog so more people could learn from it.

Today I would like to focus on on what is expected of you when you make an offer.  The question was asked of me recently, "is there an expense if I put an offer in on a house, like an inspection and all that?"

Uhhh yes!  When you have found your dream home and you decide to make a written offer to purchase it, then you are entering into a legal and binding contract by stating what you are promising to fulfill in order to get the title to the property.  This typically means that you intend to obtain financing, pay costs, close by a certain date and other items that are mutually agreed upon.  To do this you submit earnest money to show good faith to the seller that you intent to meet your end of the deal.  When the seller agrees to the offer, they also enter into a legal and binding contract to do the things they promise, such as providing a clear title and warranting the property to you on the agreed upon date and allowing possession on a certain date.

That is why it is always best to work with a licensed Realtor, who can guide you through the process and protect the parties involved.

As far as expenses involved, when you submit your offer, you pay an upfront amount to show good faith and this is called the Earnest Money.  If the contract is not fulfilled then there is the chance of losing this money if you are the reason it was not completed.  Other expenses could be any services you order prior to closing such as an inspection or repair item.  These expenses are usually the responsibility of the Buyer, unless the seller has agreed to pay for them.  If the inspection shows there are items that need repair, the legal contract to buy has a time frame that allows for objections and resolutions.  If this time expires, then the repairs can be the responsibility of the Buyer.  It is imperative to follow the contract to the letter, especially when there are time frames involved.

Never make an offer on a property that you are not sure about following through with.

We had 7 new properties listed this morning, 9 price changes and no solds today.  Went to the MLS meeting this morning and there were 29 properties highlighted.  The Buy of the Day has to be one on the west side of town with 4 bedrooms, 2 baths and a 2 car garage situated on a lot surrounded by a grove of Aspen trees.  Property features a sun room, oversized garage, RV parking, nice deck and central air.  All for only $210,000.  Call me today to take a look at this property.

You can also find many other listings on our website at Hill Realty Services, or you can reach me at Brenda Sanders.

Monday, October 4, 2010

Does anyone even know what a Real Estate Brokerage Disclosure is?

My apologies first off, for not posting in almost a week.  The week went crazy and I didn't get time to sit down and gather my thoughts.  I did, however, attend a class on real estate forms, went to lunch with a client, had a closing and took in the FREE Film Friday.  I know...sometimes you just have to give yourself some time also.  The weekend was fun also as I attended a Ribbon Cutting for the Chamber Ambassadors at the new Dead-Eye PaintBall Palace north of Evansville and then attended the Casper Children's Theater dinner.  It is simply amazing to see those awesome kids perform.  My husband and I had a GREAT time.

But today I wanted to touch on the Real Estate Brokerage Disclosure form that everyone signs when working with a Realtor.   Many times these forms are skimmed over and not thoroughly explained.  I've had several of my clients explain that they really didn't understand what they had signed.  This form lets you know in what capacity your Realtor is working for you.

Before you work with a Realtor, you should sign this form saying that you understand what it means.  If you do not sign a written agreement then you are considered to be a Customer.  I will talk about that later.  The form basically details what your relationship is while working with that agent.  For example if you are wanting to list your property with an agent, then your agent would be serving as your Seller's Agent.  A seller's agent will represent you the seller and owes you the duty of utmost good faith, loyalty and fidelity in addition to the following:

  • performing the the terms of any written agreement with any parties of the transaction
  • exercise reasonable skill and care
  • advise the parties to obtain expert advice as to material matters that the specific are beyond the agents expertise.
  • present all offers and counteroffers in a timely manner
  • promptly account for all money and property that the Broker has received.
  • keep you fully informed regarding the transaction
  • If your agent is going to represent both the Buyer and Seller then they must obtain written consent of the parties before assisting the Buyer and Seller in the same real estate transaction as an Intermediary.
  • assist in complying with the terms and conditions of any contract and with the closing of the transaction
  • disclose to the parties any interests the Intermediary may have which are adverse to the interest of either party
  • disclose to prospective Buyers and known adverse material facts about the property
  • disclose to prospective Sellers, any adverse material facts, including adverse material facts pertaining to the Buyer's financial ability to perform the terms of the transaction
  • disclose to the everyone than an Intermediary owes no fiduciary duty either to the Buyer or Seller and is not allowed to negotiate on behalf of the Buyer or Seller and may be prohibited from disclosing information about the other party, which if known, could materially affect negotiations in the real estate transaction
  • disclose Buyer's intent to occupy property as primary residency
If you are purchasing a new home, then your agent could be your Buyer's Agent if you sign a written agreement.  Then your Broker will act as an agent for you.  They will represent you and also owes you a duty of utmost good faith, loyalty and fidelity in addition to the bullet points I mentioned above.

Now if you do not want to "hire" your agent to be either your Buyer's Agent or Seller's Agent, or as an Intermediary, then you remain a customer.  You are a party to the transaction but your agent owes NO duty of confidentiality to you the customer.  Any information shared with your agent may be shared with the other party to the transaction as your own risk.  As a customer you should not tell your agent any information that you do not want shared with the other parties of the transaction.  The Broker/agent must treat you honestly and with fairness disclosing all material matters actually known by the agent.  The agent also owed the customer the same obligations enumerated in the bullet points above.

And finally, there is the Intermediary.  An Intermediary does NOT owe the parties any duties as an agent including fiduciary duties of loyalty and fidelity but they will have the obligations of the bullet points made above.

If you decide to purchase a property that is also listed with the agent, then an Intermediary disclosure is signed.

Now that you understand all of that, there is another category called the Designated Agent.  This occurs when you have the buyer and the seller working in the same office and the Broker "designates" and agent to work as a Buyer's Agent or Seller's agent and the Broker (or someone they appoint) becomes the "Transaction Manager".  This person will supervise the transaction and will NOT disclose to either party any confidential information about the Buyer or Seller.

I realize this is a lot of information to stomach, but in reality if you are entering into a real estate transaction, you do need to know the responsibilities of the parties involved.  Who is looking out for you?  Who is looking out for the other party?  Make sure and ask your agent about this disclosure and make sure you understand what you are signing.

In the brighter spot of the day, in the last week we have had 41 NEW listings, 38 changes in price and 27 residential properties sold.  I'd say that it was a good 6 days.  Word on the streets are that the Treasury Dept is considering raising rates to stimulate the economy.  Rates lately have been in the lower 4%.  Why wait for them to go back up to 5% or even 6%.  If you know of someone that has indicated they might be wanting to sell their home or perhaps buy a home, please pass this information on.  I love hearing comments from folks that read my blog.  Also visit our website to find out how much you might be able to qualify for...Hill Realty Prequalification.

Sample Real Estate Brokerage Disclosure Form