Posts Tagged ‘lehigh valley homes for sale’

• 3 programs to help you buy a house if you can’t get a mortgage.

  
  I think that there are still challenges in today’s real estate market in either buying or selling a house. Suffice it to say that there are  a lot of folks who owe more than what their home is worth (“underwater”).  There are enough people who have credit problems because of the recession that started in 2007.  Lots of recent  college graduates are strapped with student debt and no jobs and living at home. The economic “recovery” has begun but it is taking forever. And certainly the banks and mortgage companies have not eased up that much on underwriting criteria for buyers. An average credit score to get a conventional mortgage is still almost in the mid 700s. FHA  and VA  are still options but I think we  need to do a better job in spreading the word on those programs and how they work. Plus there are concerns regarding FHA continuous funding. FHA mortgage insurance premium is the highest of any program and never goes away until you finally sell.

  I would speculate that with the uncertainty of the economy, that customers are just reluctant to take the risk in owning.

  I’ll offer a few alternatives that you might consider in getting  into the housing market. I mean you have to live somewhere. Might as well be a place of your own. Here are three for your consideration.

  1. Rent with an option to buy. Probably the most well-known and popular. However it can be the most misunderstood program. An “option” is exactly that. You enter into a  lease to rent a home and you agree with the owner that at some point in time you will, or will not, exercise the option to buy the house at an agreed upon price. You may or may not have put up any money toward that option at the lease signing. You and the landlord may have decided that a portion of the rent goes toward the purchase price or the option. Just remember if you don’t exercise the option, you just remain a tenant and have no ownership rights. Whether you get any money back is determined  by the terms of the option agreement.

  2. Lease purchase , land contract or installment contract.  Buyer and Seller enter into an agreement of sale for the purchase of property. The sellers maintain the title to the property during the term of the contract and the buyers have an equitable interest.  A note of caution here to both parties. If the seller has an existing mortgage on the property there may be and probably is a “Due on Sale ” clause in the mortgage documents. This will indicate that if any transfer of equity occurs then the entire loan will become due in full immediately. Depending on the size  of the existing loan, this could cause some major problems for both buyer and seller. Any real estate agent worth their salt will check all recorded documents before proceeding with a proposal. A good real estate attorney needs to be involved for each party. If there is no mortgage , then the owner can act as the bank and transfer title to the buyer . Depending on any down money and credit obligations the equity build up is subject to negotiations at the time of the offer. Again I would recommend a good real estate attorney get involved with any preparation for both buyer and seller.
  One nice benefit of this type of transaction is that the buyers can get the tax benefits of home ownership.

  3. New program. Just heard about this one. A company buys the home for you and the client enters into an agreement of sale to purchase the property within a certain period of time, i.e 5 years. You put up a down payment of 5 or 10% and pay a 3% admin fee to the company at the time of occupancy. You get the house and its yours to live in as a renter at an agreed upon monthly rent and purchase price. The big difference between this and the rent with option is if you do not get a mortgage by the end of the term you get your down payment back. They keep the 3%. You also agree to a 2-3 % annual rent increase during the term. Again this program is for people who have not been able to qualify for a normal mortgage because of unusual catastrophic circumstances.  Lost a job, unusually high medical bills, and then lost a home through foreclosure or just had some hard times and are trying to work yourself back.  That’s why you agree to a 5+ term. And of course if you can a mortgage sooner, there is no prepayment penalty. There are some additional features. Give me a call and we can discuss some additional details.

  A  few “options” to think about. Just leave me a comment. Contact me via Facebook, Linkedin or Twitter or the old fashion ways of email, salvatoreruta13@gmail.com or cell phone 6107372310

   

• And the question is?

  
  Haven’t played Jeopardy in a while or watched it on TV. But I always thought that the premise was a good one. Give someone the answer and see if they can come up with the right question.  It occurred to me that I am usually walking around with what I think are  all the right answers to all kinds of questions. I guess  I might now recognize that I am somewhat pretentious in my conclusion.  I guess I need your help. How about I give you some answers and you give me what you think are the right questions. Hopefully, I can learn something with you and become a better agent.

  You know, years ago when I first got into the Real Estate business, I had a Broker who told me “Sam, you don’t sell real estate, you solve people’s problems”. That’s stuck with me and I think I have done a pretty good job in asking the right questions to solve those problems. But I think its time to get the customer’s take on this and get you to ask some questions. Anyway, lets see where we go with this and work together. I’ll give you the answer. You let me know what the questions should be. I’ll look at your questions and post them later to get some other folks to chime in if they think you are right wron.  Let me give you an example. 3.5% down payment  is the answer. The question might be,” What is an FHA mortgage ? ” Okay, lets give it a try.

  1.  Seller Assist is the answer. What is the question? This is the format which I won’t repeat every time. You’ll get the drift.
  2. No down payment required
  3. 28%/36%
  4. Buyer’s Agent
  5. Seller’s Agent
  6. Multiple Listing Service
  7. Escrow
  8. Radon Gas
  9. Short Sale
  10. Transunion, Experian, Equifax
  11. Title Insurance
  12.Prepaid Items
  13. 2 years worth of tax returns
  14. A real estate agent
  15. Purchase offer

  Okay, that’s enough for now. Give it a shot. Either comment below with your questions or email me if you like. The more I think about it there can be several different questions for the answers. In addition here is  a podcast that will explain how one might go about purchasing a multi family home where you can  live in and collect rent to help pay for your mortgage. If you would like to pursue that let me know. It can be challenging , but it can  be the start of a pretty good investment portfolio.

  Contact me at 610-737-2310 or email me at salvatoreruta13@gmail.com. Appreciate it.

• Spring Market brings confidence, I think.

  

   

  I’m not one who just takes recent economic news as gospel. But having said that, it does look like we are moving forward with a better housing market. Just take a look at this recent post by Don DeZube of the National Association of Realtors.  Spring Market. You have to admit its pretty positive.  The increases are slight but are running ahead of  last year. The office that I manage is up about 6% over last year. That includes all categories: average sale price, less time on the market, list price of homes, total volume sold and total listing volume.

  If there is one problem, it’s that we do not have enough good salable properties on the market. The buyer demand is there and we find ourselves in multiple offer situations. The sellers are happy but the buyers are not. One  cause for the shortage certainly can be attributed in part to  thousands of properties still”underwater”, that is, the owners owe more than the house is worth. Banks are slow in approving possible short sales. Also the Feds have not extended the “debt forgiveness ” provision that allowed sellers to escape the tax consequences of such a sale. There is also some implication  that lenders are holding back millions of stalled foreclosures from the market in the hope that  rising prices will allow the lenders to recoup a larger return of dollars at the “Sheriff Sale”. Who knows…Plus under the new QM rules (Qualified Mortgage), underwriting guidelines are making it  much harder for the average home purchaser to qualify for a mortgage.

  

   

  Lenders are trying to address the above issues by loosing up certain underwriting criteria. Credit scores of 620 and in some cases 550 will get you into a home.  The fact that mortgage applications for all types of  loans are off in some cases 60% from last year might be one reason that lenders are looking for business with less than a truant officer’s mentality. If they don’t lend it, they are not going to make it. Not rocket science.

  Here is an explanation to help you better understand the “QM” rules.

  One last thing that I have mentioned  several times. If you are in financial trouble, wondering about whether you can stay in your home because you are behind in your mortgage, are considering bankruptcy or in a reverse mortgage and you have any questions, please give me a call. Don’t do anything drastic until you have a chance to talk to a  professional. I can recommend several that can help. Call me at 6107372310. No obligation.

   

• So what’s the deal with the Stock Market? Gimme the House instead.

  

   

  I don’t have a clue.  Used to be  able to gauge the housing market by what’s going on in the Stock Market.
  I gave up on that comparison a long time ago. To me it makes absolutely no sense. How can a barometer of the economy change so fast. I mean really, up 200 points one day, down 225 the next. I saw a pundit on a business show the other day that said traders are now using computer programs that make changes in a nano second. How is that possible? They buy, sell  and set the tone for the market before you or I even have a chance to act before our first cup of coffee. Crazy….  There is a thing called “Penny Stocks”. Companies that are looking for money and issue stocks that are worth literally  less than a penny a share. Okay……  I’ll buy a hundred shares for a dollar? Still sounds like a night at the Casinos to me. Kinda like playing the penny slot machines. Maybe I’ll hit it big and get a 1000% return.

  Wall street might be a dead-end for the average family.  But then there is the housing market. The great banking debacle of  2007 seems like a generation ago. Mention to a millennial that their grandparents actually had double-digit interest rates when they bought their first house, they look at you like  you have two heads. But it’s 2014 and there is a zero point 30 year fixed rate at 4.875%.  Pretty good.  The values of homes are rising again and home owners are looking at  increased equity. Buyers are coming out of hibernation but are still a little unsure of how to go about that purchase. One thing that is  a must, is that both buyers and sellers have to be reasonable in negotiating.
  Credit is still a concern but there are programs to address the buyer with as little as 580 credit score. How can that be? I have always said that there are only a few ways that banks can make money. The  main way is to lend it. The refinance boom is over for lenders. That means they have to go after purchasers of homes who need mortgages. Now is a great time to be a buyer and negotiate with a lender for a great rate.  For a really concise explanation of the current market and what you might need for a down payment and minimum credit scores  for  potential buyers, listen to this podcast.

  There is no getting away  from the financial trauma we all experienced over the last several years, but the housing market is coming back and there is no better investment for the average family. The volatility of the stock market is something that a lot of us just don’t want to risk, at least not right now. There’s something about an”Inverted Yield Curve” that leaves me wondering what it all means. Call me for housing info at 6107372310. Or email me at my new email address salvatoreruta13@gmail.com

• The old mortgage is back and so are the real buyers.

  

   

  Did you know that you need to have good credit to apply for a mortgage? Did you know that you have to have a job to get a mortgage? Did you know that you have to have a down payment to get a mortgage? Surprised??? Well you might be if you are one of those folks who witnessed and participated in  the debacle that occurred in 2007-2008.

  Yes, it was  loose lending. It seemed like anyone could get financing if they needed it. I won’t go into actual cases right now. I’ll save that for another blog or a beer at a local gin mill. Suffice it to say, it was nuts. There were companies that were even giving home equity loans in addition to first mortgages at a closing with a credit card to top off the craziness.

  Well now we have Dodd-Frank which are new rules and regulationss passed by Congress and signed by the President to govern how lenders must apply stricter standards for getting new mortgages by a consumer. Dodd-Frank also established the Consumer Finance Protection Bureau, to make sure that the financial mess doesn’t occur again. It  provides an avenue for a consumer to file a complaint against a lender if they feel they are being cheated or question how the process is being utilized as they attempt to get a loan of any kind. You can visit them at their web site at  http://www.consumerfinance.gov/The goal is admirable but they have no oversight. They are basically an independent organization working through the Federal Reserve, which has no Congressional oversight.  A problem I think which needs to change in a hurry. They have to be responsible to somebody!

  So what can you expect if you need a mortgage.
  1. A down payment. As little as 3 1/2 % down with an FHA mortgage.  A credit score minimum of 620, depending on the lender. Conventional loan, 5%  down with a minimum credit care in the 700+ area, again depending on the lender.

  2. You need to prove your income. W2’s are fine but if you are self employed and are dealing with a lot of cash and you have large write offs, you are going to have to submit copies of your most current income tax filings.  I can’t help you if you are showing  very little income or substantial losses.  The lenders are not going to buy it.

  3. All funds have to be tracked even if they are gifted funds. So if uncle Louie is going to give you the money, the lenders are going to want proof that he didn’t borrow it from somebody. You need to get into your account at least 3 months before you need to verify it with a lender. If you are a veteran you can borrow everything including all of the down payment. And by the way thanks for your service. Love you folks.

  4. Debt load. The old 28% of your gross monthly income towards principle, interest, insurance and taxes is probably a safe benchmark to determine a monthly maximum payment. You can safely add another  8% of your income to other debt and figure you can still qualify. In some cases lenders will allow you to go as high as 41% on the back end to qualify. I see this mostly in Government loans. But be conservative.  You have to make the payment. Talk to me and I’ll give you a range of loans that you can afford based on the type and down payment.

  Really what has occurred is that we have returned to a normal mortgage lending situation.  A consumer really has to be able to afford  the loan.  And other than veterans, one really has to have some”skin in the game”that is, a down payment. No more interest only loans, no negative amortization loans, where you are interest short on the payment. No more no documentation loans where all you had to do is tell the loan officer how much you earned without proving written verification.  In other words, the truth is back and they are checking to make sure of it. If you need some help in navigating some of these new old rules for getting a loan before you start your home shopping , then give me a call at 6107372310. I’ll be glad to help you. If you are in the market for a home and you meet an agent that does not ask you pre qualifying financial questions and tries to pass you off to a mortgage lender quickly, I would doubt that the agent has the knowledge or the desire to really engage you and provide you with sound financial advice.  Keep searching.

• Here’s a little secret in negotiating with either a buyer or seller.

  

   

  Real Estate Agents are always put in a position of representing somebody. Most of us tend to think of an agent as either representing the seller or the buyer. Pennsylvania law requires that once an agent meets a consumer for the first time and there is a “significant discussion of real estate” that we are required to give them a written disclosure regarding the different kinds of representation that we can provide. The client has to acknowledge that disclosure in writing. It doesn’t bind the client to the agent. It’s just that it proves that the agent has done his or her due diligence in complying with the law. There is no contract at this time.

  There is also the tricky position an agent is put in if a consumer calls the real estate office for the first time and begins to engage in a “significant discussion regarding real estate”. There is particular language that an agent must use and disclose to the consumer again regarding representation. To say the least it can get to be a little unusual and uncomfortable for both parties especially if the customer is just calling to find out where the property is or whether it has 3 or 4 bedrooms. We are not lawyers but sometimes you wonder how close we come. It really gets complicated if you have to explain the differences between buyer, seller, transaction brokerage(No representation) or Dual or Designated Agency. Dual Agency is when the client purchases the listing agent’s property and Designated Agency is when the client wants to purchase another home through the agent’s office listed by a fellow agent in that office. Oh yeh, that puts the broker of the company in a dual agency position.

  Did you get all that? I can assure that even some experienced agents don’t get it. Where does the rapport development come in? Where does the  need determination start by the agent? I have to ask you some questions. I don’t want to interrogate you like we are  in some court. There is this “dance” that occurs between the agent and the potential client. I want to comply with the law  but I don’t want to offend the customer.

  Let me get back to that “little secret” that will help you in negotiating with either the buyer or seller in a transaction. When you decide you want to either buy or sell a home and you are checking out agents to assist you. Ask them right up front “Are they going to represent you” In other words are they going to work for you on your behalf. Are the going to keep everything you tell them confidential, are they going to use their negotiating skills to get you the best deal possible. Do this up front and before you give them any information ask them to put that obligation in writing. In the case of the home for sale , a listing contract that will spell out their obligation to work on your behalf to get the highest and best price for your home. In the case of the buyer, a  buyer agency contract that obligates the agent to find you the best home for the best price. In either case, you the consumer make the final decision.  But the point is, if you do this up front in writing then you have something that you can enforce if you feel that the agent isn’t representing you in your best interests.

  The written contract is usually not a problem with a listing,that is, an owner who wants to sell his or her home. No one is going to do anything regarding the marketing of that home until there is contract. Representing a buyer is a usually a different story. A lot of buyers do not want to feel obligated to one agent. Fine shop around, but one more little secret,do not disclose any personal information as far as your financial, bottom line pricing or other personal information, until you have a contract with that agent. As far as a fee you can negotiate that in with the Buyer’s Agency Contract , so that the fee can actually come from the seller at the time of settlement.

  I guess as a final note and it isn’t any secret , before you pick someone, make the contacts, make sure they provide you with Consumer Notice , understand representation, make the agent commit in writing and then discuss confidential information.

  Need some help on this topic and just want to chat about it? Contact me at samruta@yahoo.com or call me at 610-7372310.

• 5 different ways to engage using Social Media and stay connected.

  I am getting more geekitized the older I get. I really have become fascinated with all aspects of Social Media and the profound ramifications that it has on the practice of my business, which is selling houses and helping buyers find their dream homes. I don’t feel like I am a johnny come lately to this era but it has been a learning experience. Here are some ways that I promise I’ll stay connected with you and get results.

  1. Facebook. This blog is linked to my Facebook page and will also provide us with an opportunity for a 2 way communication. I’ll try to keep the blog real estate related but I have to say I can slip out of that on occasion . I love the Military and the men and women who serve and have served. You will pick up my bias.

  2. Linked In. Purported to be more of a business venue, I am glad to participate, and though the professions are diverse , they all need advice on real estate. Be glad to give you mine.

  3. Twitter. 140 characters to get your point across makes a lot of sense in initiating a conversation. I have to get better at this to get my point across quickly. It will be a tease but then I hope you will contact me for an in depth analysis.

  4. Pinterest. I am new to this site but I like the chance to “Pin” and also to provide pictures and video to get a real sense of visual reality of one’s opinion.

  5. Google Plus. The big bad boy of internet everything. How can you not be aware of Google and ignore its power.
  The fact of the matter it really has a way to go to match Facebook as far as popularity, but can’t be ignored.

  There are a plethora of other contact venues but I’ll start with the above to get you to discuss what’s on your mind. I’m pretty easy. And of course I am open and eager to interact with you on any platform that you might think beneficial. In fact, please give me your recommendations. Look forward to hearing from you.

  Sam

• You have got to be kidding! I can still buy or sell????

  There is nothing I like to do in this world than to be with my grandkids and mess around. I  also love my job in helping and advising folks on the purchase or sale of their home. I have been doing it for over 35 years.  There is something about watching the excitement in the eyes of the first time home buyer or the satisfaction from a senior citizen (me by the way) when he or she is able to move on, supplement their nest egg and enjoy a nice retirement.

  Well, I don’t plan on retiring anytime soon. I like working. Besides, I am not a big hobby guy. I am sure my wife Gloria would get tired of me real fast following her around like some puppy dog while she does her thing with her girlfriends. Forget it.

  I gladly prognosticate on the future of the real estate market. What are you waiting for?  If you are a buyer, rates are still low. Under 5%. Prices are still reasonable.  But they are starting to creep up. Mortgage lenders are aggressively going after FHA and 5% down buyers. Foreclosures are down and a lot of folks are pulling out of their underwater status. And they have to sell.

  Now all this doesn’t mean we will have the free for all that we had in  the early 2000’s when you didn’t even need a job to get a loan. Thank goodness those days are over. But don’t let those that have a home and are not in my business given you a bunch of baloney that you need an 800 credit score to get a loan. Did you know that you get a new FHA home loan if you filed for Bankruptcy and have been discharged for at least 2 years, and of course if you have been paying your bills on time since then.

  Did you know that as a Veteran, you don’t even need a down payment and you can have the owner of the home pay for all of your closing costs. There are also 100% loans available through the USDA , that would be the United States Department of Agriculture.  They are loans that are available for single family homes in designated rural areas.

  This is for real. Give me a call at 6107372310 or email me at samruta@yahoo.com to discuss some real possibilities. I’m not kidding.

• PODCAST: 2012 Outlook Survey – Poll-Optimism Rises

  At this time of year every 4 years we are inundated with all kinds of political polls. Who leads, who’s behind, who looks good, are we better off now than before and who told the last lie about the other’s spouse? Makes me sick to my stomach. All that matters  is who I will vote for behind the closed curtain that first Tuesday in November.  And I am not telling anybody….

  But there are some polls that I put my trust in. Attached are two podcasts that give some idea how we are all feeling right now about the American Dream of  home ownership. It’s encouraging.

  Forget the banks, the bailout, Europe, China and the Fed.  Well maybe we can’t totally forget the Fed. Seems like they have their hands around our throats and won’t be satisfied until they have our great grandchildren hijacked and locked into indentured servitude.

  But take a listen to these 2 podcasts and feel good about yourselves and the tenacity you have in not giving up dreams of home ownership.

  Optimism growing  podcast 1

  Optimism growing podcast 2

  Hey I am not here to guarantee anything, but I have to feel at least we are making progress.  Hope you do too.
  Don’t forget, if you have any questions, give me a call at 610-737-2310 or email me at samruta@yahoo.com

• 5 things you can do to make sure you don’t miss the home buying opportunity of a life time.

  

   

  Well we have six months under our belts for 2012. What happened and what is going to happen? Prognostication has always been fun, but after 30 plus years in the Real Estate Sales business, I think I can at least spot some trends that are critical.  Recognizing those trends might give you a leg up on the competition for the purchase of your home.

  1. Sales are up. It’s good news and bad news. More sales mean more sellers are getting rid of those houses they can’t handle any more. Bad news, the inventory is shrinking. That includes foreclosures and God help us, short sales. I have heard several cases of multiple offers on a single property and buyers being very disappointed.
  So the first thing you should do is to  get a good real estate agent to work with. Tell he or she that you definitely want to buy and you are motivated to move quickly. Tell them that it is incumbent upon them to keep you informed as far as what is available and be ready to see it fast.  Let them know that you will work exclusively with them if they preform.  If you are going to shop with other agents, most of them will put you on the back burner and you will not find the deals.

  2. Get pre approved for a mortgage ahead of time so that you can move fast when you find the home you want. Your offer will be much stronger if you can indicate that your mortgage approval is conditioned only upon an appraisal for a home.
  Mortgage companies and banks in some cases are no longer willing to give you this service because of cost and risk. Have your real estate agent help with his or her contacts. Or start with your own bank and put the squeeze on them.

  3.  Look at bank owned properties (foreclosures) , than conventional, then short sales.  Start with bank owned.  No need to go through a lot of  paperwork from the seller to the bank to you. By this time, they own it and they want to get rid of it.  Your chances of getting a good price here are strong since there is no emotion attached or mortgage to pay off.
  Then try conventional. If the owners are not underwater and there is equity and they have to move, the motivation will be strong to keep the  selling price at similar levels of foreclosures.
  Last, Go ahead and try short sales, but you have to be patient. Make sure your agent is familiar with the process as well as the listing agent. And by the way, do not agree to use a short sale negotiating company that wants to charge you a fee as the buyer.  This could literally add thousands of dollars to your closing costs. This should be the responsibility of the seller.
  If you are a seller and need to sell because you are underwater, my advice is to contact an attorney who is familiar with negotiating with creditors. In most cases that means finding a good Bankruptcy attorney. You do not have to file bankruptcy to use these attorneys. But they are used to doing deals with creditors and they know the paperwork. You will pay a fee but it might be worth it to  renegotiate a first or second mortgage to get the house sold if you have a buyer.

  4. Do it soon. Interest rates are not going to stay this low forever. Let me give you an example. A  $200,000  mortgage at 3.5 %  for 30 years will mean monthly payments of $898.  That same mortgage at 5% will cost $1073 a month. And these amounts do not include taxes or insurance.

  5. Regardless of the offer, don’t forget to ask the sellers to help you with closing costs. Sellers are motivated to sell. But,…. And this is a big But. Don’t insult the seller with a low ball offer and ask for closing cost help.  You will probably put yourself in a lousy negotiating position and also insult the seller. Be reasonable. In any negotiation, both parties have to feel like they won something.

  Now get out there and go buy or  sell  a house.

  If you want me to help, then call me at 610-737-2310 or email me at  samruta@yahoo.com