Archive for the ‘Mortgages and Loans’ Category
$8000 Tax Credit Expiring in 90 Days
ATTENTION HOME BUYERS!! The $8000 Tax Credit for Purchasing a Home Expires in Only 90 Days.
Banks are warning buyers that Strict Loan Underwriting and Loan Application Backlogs mean that standard loans are taking 90 days or more to close.
Please act quickly to put a home under contract and secure your financing, now. Time is running out. If you can’t close on or before the November 30, 2009, you lose $8000. Period.
Thank you for visiting Why 6 Percent.com. We can expose your property to millions of serious homebuyers and save you thousands of dollars in commisssions and fee’s. Contact us today. Time is ticking and buyer’s are waiting.
5 Smart Moves for Home Buyers
Record low interest rates, combined with deeply discounted home prices, have bottom fishers swimming frantically, in search of the perfect deal on the perfect home. But, before you strike, beware. The Top 5 Tips to Avoid getting Hooked in a bad way are Read More….
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Question About Negotiating Low Appraisal
Hello Why 6 Percent,
We are selling a home for $249,500. We agreed to pay $7000 closing costs. The Buyer is putting down $25,000. The appraisal came in $3000 less than sale price. Our Realator said this could be a deal breaker. Since the Lender isn’t lending the full price why would this be an issue?
I could understand if the Lender was lending the total sale price. They wouldn’t want to lend more than house was appraised at. I get that.
Thanks,
Terri F.
Dear Terri,
The fact the appraisal came in $3000 below the selling price of $249,500 can be a problem for the seller, buyer and lender for a number of reasons.
First, buyer’s usually hesitate to pay more for a property than the appraised amount, but there are other issues, as well.
From what you told me, it sounds as if your buyer is applying for a 90 percent loan. (Selling price $249,500 with $25,000 down). The fact the appraisal came in at $246,500 means that the lender will only finance $221,850, or 90% of the appraised amount. This means that your buyer will need to come up with another $2700 at closing to make up the $249,500 sales price.
The reason I am think that the increased cash up front may be a problem for these buyer’s, is that they are financing $7000 in closing costs. If the upfront cash wasn’t an issue for them, they would have likely written an offer for $242,500. No doubt, you would have accepted the $242,500 because that is your actual net sales price, after the closing costs are paid from the proceeds of the sale.
In order to keep the sale together, you have a few options to consider. One, reduce the sales price to the appraisal amount. Two, ask the agent’s to kick in some of the commission to get the deal to work. They probably will consider helping. Three, you or the agent can provide better comp’s to the appraiser and ask for a review of the value. Or, fourthly, buyer, seller and agents can split the difference to get the deal closed. A four way split of the $2700 would only cost under $700 for each of you, so that may be a good way to overcome this problem and get on with your life.
Thank you so much for emailing me. Please follow up and let me know how this goes for you, Terri. We are here to help.
Thank you for visiting Why6Percent.com. We have helped thousands of people sell their homes and save money. We can help you, too. Call us at 1-800-381-9496.
3 Reasons Why Interest Rates Will Stay Low
The Top 3 Reasons that Interest Rates Will Stay Low
- The collapse in commercial real estate. Property values are down 35 percent since October 2007 and the majority of minds in the business believe that values will decline another 11-20 percent.
- The continuing fall in property values makes it difficult, if not impossible, to refinance as many as $165 billion dollars in troubled loans.
- Commerical property is a significant drag on overall economic growth and recovery. The country runs a major risk of another financial crisis, if lenders suffer unexpected losses.
Fed chairman Bernake told the Senate Banking Committee, “As the recessions’s gotten worse in the last six months or so, we’re seeing increased vacancy, declining rents, falling prices, and so, more pressure on commerical real estate.”
With commercial real estate in a Danger Zone, we predict that the Fed may be forced to leave the emergency lending rates close to zero, for longer than many pundits expect.
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Todays Article of Interest for Real Estate: What are Homebuyers Looking for When it Comes to Location???
Half of US Homeowners UnderWater by 2011
“NEW YORK (Reuters) – The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March, portending another blow to the housing market, Deutsche Bank said on Wednesday. “Home price declines will have their biggest impact on prime “conforming” loans that meet underwriting and size guidelines of Fannie Mae and Freddie Mac, the bank said in a report. Read More
One clue to predicting further declines in home values may be an insight into the “Shadow Inventory” of homes currently in default. To learn more about the Hidden Truths, CLICK HERE. Very interesting, short article.
Thank you for visiting Why 6 Percent. If you are serious about selling, we have a proven solution to help you. Call 1-800-381-9496 or visit www.why6percent.com today to learn more.
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New Appraisal Rule Hurts Sellers and Buyer’s, Alike
We have been warning Why 6 Percent readers about the danger of appraisal problems, after the new “Home Valuation Code of Conduct” went into effect on May 1st.
After being in effect for less than 90 days, 90 percent of real estate professionals have reported that they have had at least one sale fall apart, due to the new rule.
One thing is certain. Something is Wrong and the Timing Couldn’t Be Worse. To Read More about Appraisal Problems and Learn What Others Have Done to Correct Them, Click Here.
Thank you for visiting Why 6 Percent. We have saved thousands of home sellers and buyers a lot of money. We can Help You, too, by providing you with the power of the MLS and protecting your by owner status.
10 Signs that We’ve Hit the Bottom in Housing
Finally, the news we’ve all been waiting for…the real estate market is bottoming out, after a steep, long decline.
To read the about the 10 newsworthy signs that signal the worst may be behind us, CLICK HERE
Thank you for visiting Why 6 Percent. We have provided the power of the MLS to home sellers for years. We can help you sell your home, too. Visit the website or call 1-800-381-9496 to reach 10 million home buyers each and every month!!!
Jumbo Housing Loans are Dead.
The fall off in jumbo real estate loans is a negative indicator for a housing recovery. Jumbo loans are required for properties that cost more than $400,000. Although $400,000 sounds like a lot for a home, it isn’t a lot of money in some area’s of the country.
The demand for jumbo loans has fallen over 70 percent. And, bankers and real estate brokers say the lack of demand for properties over $400,000 has a significant impact on the economy and housing market.
It is estimated that the decline in the jumbo loan market has a $42 billion impact on the economy. In addition, it is a looming sign that the upper end of the housing market isn’t moving, creating a road block at the top of the market that filters down.
Thank you for visiting Why 6 Percent. If you are selling your own home, you need the exposure of the MLS, Realtor.com and all the major websites for real estate. Our program lists you on every site and places your listing in front of 10 million home shoppers each month. Call 1-800-381-9496 and turbo charge your marketing with one click of your mouse.
Faulty Appraisals Hurt Home Sales
Home sellers and real estate agents have a new worst enemy: inaccurate home value appraisals.
Even as prices begin to stabilize and buyers re-enter the market, the appraisals many banks rely on to approve financing are causing some deals to fall apart at the last minute or forcing sellers to agree to lower prices.
Lawrence Yun, chief economist for the National Association of Realtors, said the appraisal problem is serious.
“Lenders are using appraisers who might not be familiar with a neighborhood or who compare traditional homes with distressed and discounted sales,” he said. “In the past month, stories of appraisal problems have been snowballing from across the country, with many contracts falling through at the last moment.”
Washington real estate agent Jeffrey Tanck agreed. Tanck, with the Czuba Group at McEnearney Associates, said bad appraisals have affected two of his deals in the past three months.
“In one case, a $364,000 condo came in $80,000 less than asking,” Tanck said. “That buyer was using an out-of-town lender who had no concept of this market. Another appraisal on a $317,000 coop came in $27,000 under, forcing the buyer and seller to meet halfway.”
The potential problem inaccurate valuations pose to sales can be seen in numbers that measure pending sales of existing homes. Those represent contracts that are signed but sales that haven’t closed, and are usually considered a more forward-looking gauge of housing sales.
Earlier this month, the NAR reported that pending home sales in April rose for the third-straight month, advancing 6.7 percent from March, with pending sales up more than 3 percent from a year ago. By contrast, closed sales of existing homes in May rose 2.4 percent and remained nearly 4 percent below year-ago levels.
The NAR’s Yun said he sees a danger of a delayed housing market recovery and a further rise in foreclosures “if appraisal problems are not quickly corrected.”
Tanck said part of the problem is too much work and too few appraisers, who he said are in demand right now.
“People are buying, and lenders and appraisers are both busy,” Tanck said. “But lenders should make sure they’re using appraisers with the correct market knowledge.”
Still, many indicators continue to point to stabilization in housing. The nationwide May increase in existing home sales was the first month-to-month increase since September 2005.
A separate report Tuesday from the Federal Housing Finance Agency showed declines in prices moderating, with the average U.S. home price down 0.1 percent in April from March. (All contents of this site © American City Business Journals Inc. All rights reserved.)
Click Here to Read What to Do if you Get a Low Appraisal
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Lawmakers Want to Relax Rules for Condo Financing
In what could be a “Here we go, again” scenario, Barney Frank (D) and Anthony Weiner (D) have ask Fannie Mae and Freddie Mac to back off on tightening loan standards for condominum’s.
In March, Fannie and Freddie announced that they would no longer underwrite mortgages on condo’s located in buildings where less than 70 percent of the units were Sold. Their previous policy required that 51 percent of the units be Sold, before loans were guaranteed.
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