If Your Favorite Product Became Cheaper, Or Offered More Incentives To Buy...Would You?

Loan Modifications Prove To Be a Scam for Local Homeowners

The LA Times posted a great article highlighting how many homeowners facing foreclosure are being taken advantage of. The California Association of Realtors has been warning consumers for some time now against those companies that charge upfront fees to modify a loan. That is a DRE (Dept. of Real Estate) violation. Many companies get around it by connecting with a law firm and they call it something similar to a "retainer" fee, just like if you were going to hire a lawyer to handle any other legal matter. The fact of the matter is, this brings the dark cloud back to the Real Estate industry. It seems that there is never a shortage of the "fast-buck" scam artists when there are desperate people just looking for help. I am happy to read in this article that the autorities are cracking down on these scams, but the distressed homeowners are now left with very little options.

http://www.latimes.com/business/la-fi-foreclosure-scams16-2009jul16,0,1422452.story

June '09 South Orang County Market Update Video

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Is now the time to sell?

With the median price of homes in California rising two consecutive months for the first time in nearly two years, some of you have been wondering if the time is right for you to take the money out of your home & get a great deal on a move up purchase. The answer is YES!

As your Real Estate Agent in “The Trenches” I will give you a bird’s eye view of what is truly happening in the Orange County Market!

Contrary to what the news is telling you… the market is in a “Supply and Demand” Crisis! There was so much inventory last year, it became a buyer’s market! With so many homes on the market, it extended our market time and prices fell, dramatically! Unfortunately, for normal seller’s like yourselves, if you had some equity and wanted to sell, the market would not allow you to! The Federal Government, in an attempt to help homeowners stay in their homes, froze all foreclosures from November 2008 until March 31, 2009. During this time, and still today, homes have been selling and inventory has dried up. Now there are more buyers’ than homes for sale; which in turn, it’s becoming a seller’s market again!

Last week, something good happened for homeowners; California placed a new 90 day moratorium (freeze on foreclosures) to help homeowners continue to modify their loans to help them stay in their homes! In the meantime, buyer’s are still searching the market for their dream home!

With the inventory at all time low, prices of homes are increasing! Multiple offers are back! Therefore, this is a great time for seller’s to capitalize on the market while Supply is low & Demand is high!

Who do you know looking to sell?

T.W.I.R.E. BLOG: 90-Foreclosure Moratorium Discussed

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Business Leaders Push To Expand Housing Tax Credit

by Joe Manausa on June 11, 2009

In yesterday’s edition of the online edition of the Wall Street Journal, it was reported that a group of business executives issued a set of recommendations for the White House and Congress that are aimed at jump-starting the housing market in order to stimulate a broader economic recovery. How is this important in the Tallahassee Real Estate Market?

Business Roundtable Wants Tax Credit For All Home Buyers

We have written quite a bit here lately about the First Time Homebuyers Tax Credit, so this is directly related to that program. The Business Roundtable, an association of chief executive officers of leading U.S. corporations, feels that the best way to boost the economy is to stimulate the demand side of the real estate market.

In their press release, they stated “We believe targeted, demand-side solutions – such as the ones Business Roundtable is recommending today – will provide a critical next step for a housing recovery that will help create jobs and boost the economy as a whole.” So, what exactly are their recommendations?

Demand Will Strengthen If Mortgage Rates Are Kept Low

The Business Roundtable’s recommendations are as follows:

• Keep mortgage interest rates at historically low levels (below 5 percent) for at least one year;
• Expand the current First-Time Homebuyer Tax Credit incentive from the lesser of 10 percent of the purchase price of the home or $8,000 to a higher limit of either 10 percent or $15,000 for all homebuyers, remove the income restrictions and include all primary residence purchases for one full year;
• Conduct a thorough review of current foreclosure mitigation and loan-modification programs in light of rising loan-modification re-default rates;
• Make permanent the current temporary conforming loan limits; and
• Continue to review and strengthen government efforts already underway to review and refine mortgage lending practices.

Housing Related Industries Account For More Than 20% Of The Gross Domestic Product (GDP)

The group feels that the economic recovery of our country is tied as much to housing as any other industry. According to Richard A. Smith, the Chairman of the Housing Working Group, ”housing-related industries account for more than 20 percent of the U.S. gross domestic product, the recovery of the residential housing market is vital to the recovery of the U.S. financial markets and the overall economy. Stimulating the housing market from a demand-side perspective is key to putting America back on the path to economic growth. Business and government must work together to find immediate and long-lasting solutions that address the challenges facing the U.S. economy.”

Fix Housing And You Will Fix The U.S. Economy

Ultimately, the group argues that economic recovery in the United States is not going to begin until the housing industry starts to recover. They feel like they have outlined a plan for that recovery to begin this year, but I’m curious what our readers think?

Is more government involvement going to help, or just compound the problem? Is this just “propping up” an economy that was based on housing valuations out of control? Please give voice to your opinions in the comments area below.

How To Find Homes For Sale With Seller Financing

by JOE MANAUSA on JUNE 18, 2009

I was looking through a list of reader questions and found one that really stood out. This reader was wondering how to find homes for sale where the seller was offering some or all seller financing.

Seller financing is a topic about which many people could benefit from learning. Most real estate agents will never do a transaction involving seller financing, and most homebuyers would never even think about asking for this type of assistance. And finally, most home sellers would never even realize the benefit to themselves to offer some level of owner financing.

The purpose of this post is to explore the benefits of seller financing for both home buyers and home sellers.

Homes For Sale With Seller Financing

Often times, we hear the term “creative financing” being used in real estate, yet few people really understand what this really means. For the sake of simplicity, I refer to “creative financing” as anything that occurs in financing a home purchase that falls outside of just working with a lender’s standard loan product.

Seller financing (or owner financing) is one great creative financing technique. In a seller financed transaction, the current owner of the home will lend some or all (typically only some) of the money required for the purchase of the home to the buyer by using what is called a “purchase money mortgage.”

But it’s the seller’s home, why would he or she lend money to a buyer to buy it? There are quite a few answers that work here, but right now the best answer is because by offering to assist buyers in the purchase of their home, home sellers are making it available to more buyers. The more people who are willing and able to buy a home, the higher the value of that home will be.

How Home Buyers Can Benefit From Using Owner Financing When Buying A Home

Most people do not realize that even buyers with perfect, plentiful credit can benefit from seller financing when they purchase their next home. I try to counsel home buyers into understanding that the real estate transaction is much more than just “purchase price,” rather it is about the entire structure of the terms of the deal. Consider this question …

“Would you buy a $10M home if I could show you how to finance it for just $500 per month?” While I do not know what your answer is, but mine will always be “heck yeah!” I would love to live in a big castle for only $500 per month. Unfortunately, I do not know how to do that at this time, but it does demonstrate that price is only one element of the deal.

Owner financing, with some creative application, can help many people buy some or more home. The owner financed portion of the deal could be an amount equal to what is required by a mortgage lender for the down payment (for example, on a $250K sale, the owner could hold a $50K second mortgage while a mortgage bank does a new first mortgage for $200K).

With no down-payment needed, many more people can qualify to buy that home. Don’t forget, this year in Tallahassee, we are seeing a failure rate of homes on the market exceeding 80%! Every special skill or tool a home seller can implement might be the difference between selling their home or just being another statistic on the failed to sell list.

How Home Sellers Can Benefit From Offering Financing For The Buyer

Most home sellers never even consider offering seller financing to the prospective buyers of their home. This is a shame. It is too bad that their real estate professional did not spend whatever time required to get them to understand the importance of offering seller financing as one option for all prospective home buyers. All prospective home sellers should educate themselves on creative solutions for selling a home.

Different Types And Levels Of Seller Financing

One key piece of information about owner financing is that there are no rules or specifically defined specifications for what we call seller financing. Any method of thinking outside of the box when selling a home is an acceptable solution. Here are a few to stimulate your thinking:

• The seller holds a 2nd mortgage in an amount equal to 23% of the sales price (down payment plus closing costs).
• The seller requires no payments on the 2nd mortgage until a balloon date in the future (allowing the buyer to make payments on the portion of the home that he or she can afford).
• The seller holds a 2nd mortgage with an interest rate that brings the total mortgage payment to the level the buyer can afford.

How To Find Homes For Sale With Seller Financing

By now, I hope that you have considered that the best way to find homes for sale with seller financing is to “create them.” We already addressed the fact that most sellers do not understand the benefits of utilizing owner financing to sell their home. Because of this, we need a great real estate professional to present offers to home owners and explain to them why they should consider financing all or a portion of their home.

That’s right, every home on the market is a home for sale with seller financing, if you work with a great real estate agent. Rather than run out and talk to every home seller that advertises “Owner Financing,” first start with somebody who will work for your best interests and find you the single-best home to buy!