3 Real Estate Myths Debunked

June 13, 2010

Common REAL ESTATE MYTHS

MYTH #1 If I use a Realtor to help me find a home, I will have to pay more.
FALSE. As a buyer, a Realtor will save you time and money. Hiring a Realtor when you begin the process of searching for your new home is the best way to be sure you will get the most accurate information on the current market. Getting the most accurate information will help you avoid over paying for a home as well as saving you countless hours contemplating homes that are not even on the market anymore. Many websites are not up to date with the current inventory of homes, but your Realtor is!.
( for more information see my blog post.. With the Internet, why do I need a Realtor? )
And no where else can you get professional representation and not pay for it..That is right, the sellers of the property pay the commission to YOUR buyers agent.
I repeat, you get the benefit of a trained Real Estate Professional ,a Realtor, to help you search for homes, line up financing, tour properties, study market conditions, perform market research and THE SELLER PAYS FOR IT.!!


MYTH #2 If I list my house with a Realtor, I will not make as much as if I do it myself.
VERY FALSE. Many people want to sell their homes on their own and “save money”.  If saving money is your goal, cut back on your expenses and find a cheap hobby like bird watching. IF you want to make money, hire a Realtor to analyze, list and market your home.
Some people may have the time, money and knowledge ( and patience ) to list and sell their own home. But most do not. The typical scenario goes like this:
A homeowner wants to save the 6-7% commission he would pay a Realtor and do it himself.  Most homeowners are not objective about the real value of their home and naturally think its worth more than it really is. The market dictates the price point for the home, unfortunately, not the amount of  blood, sweat and tears the homeowner has into it. So they over price the home and it sits on the market as other properly priced homes sell around it. Then after months of interrupted dinners with people wanting to see the home, and tons of calls and questions about the home they get someone who says : I LOVE IT, I WANT IT ! Unfortunately, this person has no money and no credit…they are not pre -approved and could not buy the home at any price. All this is found out about 3 weeks after the homeowner stops running ads and has stopped trying to sell his house thinking it was sold….Back to square one and he has 5 months wasted..I could go on…HIRE A Realtor at the beginning, get it priced right, get the proper information,get it marketed right,  show the home only to qualified buyers and get it sold.


MYTH #3 Bank Foreclosures are the best way to get a property below market value.
FALSE AGAIN Many people assume that because its a bank foreclosure, it’s gotta be a steal. Not true. Bank foreclosures are sometimes very hard to get to settlement. Dealing with the bank and getting clear title can take more time than some buyers can afford. Additionally, just because the property was foreclosed on and is now up for sale, does not mean that is priced under market value. It could just as easily be priced over market value because the bank is owed way more than its worth. The person who determined the price may know nothing about the local market.
The best way to get the most accurate real estate information is to talk to a professional Realtor…..Most Realtors will be happy to answer your questions without any obligation.
Cal Williams
Realtor
Accredited Buyer Representative

http://www.CalWilliams.com
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How to Buy a Home in 5 Easy Steps

March 19, 2010

5 Simple Steps to Buying a Home – It’s not rocket science , but you could end up taking  one giant leap  if you don’t read this blog!  ..especially first time homebuyers.

Step 1:  Find a Realtor to represent you. So many consumers spend hours and hours searching the internet for properties and driving around neighborhoods wasting time. I’ve said it before and I’ll say it again..’A good Realtor is worth his weight in gold’. Spend your time searching the internet for a Realtor, find one and call him for a consultation. You can still search for homes yourself, but your Realtor can save you countless hours searching the wrong sites and looking at properties that are already sold. 

Your Realtor will have access to an MLS service ( Multiple Listing Service) in the area you are interested in. Most websites on the internet that allow users to search for homes have outdated properties. Homes are sold and it takes time for the information to be distributed to the internet sites. In contrast, the MLS has the information immediately. The catch is only Realtors have access to the MLS.

So find a Realtor, call him or her, meet with him or her, and hire him or her. The beauty of the whole thing is your Realtor, who works for you, is only compensated when he finds you the home you want….And the compensation comes from the Sellers of the house you buy!!!  Not the Buyer!.

For information on how to find a good Realtor and what a good Realtor should do for you, see my blog post : Why Do I need A Realtor® or Real Estate Agent at all?

Step 2: Find your DREAM HOME. After you hired your agent, search the market. Your agent will provide you with time-saving tips, links to search for homes and information that will help you save time and money. By listening to your needs, a good Real Estate agent will be able to set up filters and perform accurate property searches for you. Compile a list of your 5 top homes and have your agent set up tours of your 5 favorites. When you find the home that fits your needs its time to really put your agent to work!

STEP 3: Make an offer. This is where a good agent will earn his commission and then some. Putting together an offer involves a lot of paperwork along with a fair amount of skill. Many factors need to be considered and disclosures need to be  made by both parties. Your agent will help you navigate these waters. Put your offer together with the help of your agent, taking into consideration the temperature of the current market. Once your get your property under contract….Step 4 , here we come!

Step 4: Secure Financing. Actually, if your agent knows what he is doing, you will already be pre-qualified at this point. Now its time to lock in a rate, and get your loan approved. Again, this is not difficult but you should have the advice of a Realtor. You will need some advice by someone who knows how to look at a lenders GFE(Good Faith Estimate). The GFE is where all your fees and expenses to get you in that home should be disclosed. There are rules about what a lender can and cannot change once he gives you a GFE. Your agent can help you decipher the GFE and make sure you are getting a good deal on financing.

 Step 5: Settlement on your new home.  After you have secured financing and crossed all the t’s and dotted all the i’s, its time to go to settlement. At settlement you will again cross all your t’s and dot all your i’s. Signing all the paperwork at a real estate settlement can be very stressful and intimidating… if you don’t have someone on your side to answer questions……..YOUR REALTOR!. You should understand everything you sign at settlement, and the settlement attorney is not representing you, so you may or may not get detailed explanations. 90% of the time settlements go smoothly, if not its in your best interest to have your Realtor there.

So that’s it!, 5 simple steps. Of course there are many small items that need addressed throughout the entire process, and thats why you want to find a good Realtor, and hire him to be your buyer representative.

-Cal Williams

www.CalWilliams.com 

 


Dealing with Debt: Which Debt Should You Pay off First? – Manage Your Life on Shine

January 27, 2010

One of the most common questions first time homebuyers ask me as a Real Estate Professional is  ‘Should I spend all of my tax refund on paying off my car loan to improve my credit? ” or something close to that.

With tax time approaching, what to do with your refund, if your getting one, is a huge question. Add to that the credit crunch  and how hard it is for the average American to qualify for a home loan and it becomes a very important decision.

Putting money on the wrong debt could set you back months or years if you are trying to repair your credit for the purpose of buying a home.

I urge you to investigate thoroughly before you decide what debt to pay down. You need to talk to a professional, whether its a Realtor, Lawyer,CPA or a Mortgage Broker, someone who understands how to look at your credit report and guide  you in the proper direction, based on your objective. If your trying to repair your credit or improve your credit for the purpose of getting a mortgage, talk to a Mortgage Broker or a Mortgage Banker or Realtor.

Below is a link to a good article on the topic.

via Dealing with Debt: Which Debt Should You Pay off First? – Manage Your Life on Shine.

Cal Williams

http://www.CalWilliams.com


SHORT SALES 101-The Basics

January 18, 2010

 

The Basics: Short Sales

Due to current economic conditions, the number of short sale properties on the market is rising. The increasing number of short sales on the market presents challenges for REALTORS®. Below you’ll find more information on: short sales and their challenges, the government’s efforts to address these challenges, and tools to help you navigate the short sale process. 

Home Affordable Foreclosure Alternatives Program (HAFA)

On November 30, 2009, the Treasury Department released guidelines and forms for its new Home Affordable Foreclosure Alternatives Program (HAFA), part of the  Home Affordable Modification Program (HAMP).

What is a short sale?A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.

Why is the number of short sales rising?

Due to the recent economic crisis, including rising unemployment, and drops in home prices in communities across the nation, the number of short sales is increasing. Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses.

A short sale can also be the best option for a homeowners who are “upside down” on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially.

What challenges have short sales presented for REALTORS®?

The rapid increase in the number of short sales, and the short sales process itself present a number of challenges for REALTORS®. Major challenges include:

  1. Limited experience
    Many REALTORS® are new to the short sales process; a difficulty which is compounded by many lenders’ lack of sufficient and experienced staff to process short sales. Even if the REALTORS® are experienced, most servicers are under-staffed and still not adequately trained, making negotiating a short sale particularly difficult.
  2. Absence of a uniform process and application
    Currently, both short-sales documents and processes are lender-specific, making it very difficult and time-consuming for REALTORS® to become knowledgeable and efficient in facilitating these transactions. 
  3. Multiple lenders
    When more than one lender is involved, the negotiations are much more difficult. Second lien holders often hold up the transaction to exert the largest possible payment, in exchange for releasing their lien, even though in foreclosure they will get nothing.

As a result of these challenges our members have reported difficulties with: unresponsive lenders; lost documents that require multiple submissions, inaccurate or unrealistic home value assessments, and long processing delays, which cause buyers to walk away.

What is being done to address or eliminate these challenges?

On May 14, 2009, the Obama Administration announced its upcoming Foreclosure Alternatives Program. Among other things, the new program:

  • Establishes financial incentives for servicers, sellers, and second lien holders to encourage the completion of short-sale transactions.
  • Requires that a timeline, of no fewer than 90 days, be set to allow a homeowner to sell a home, without threat of foreclosure action.
  • Requires the short sale agreement to specify reasonable and customary real estate commissions and costs to be deducted from the sales prices. (The servicer must agree not to negotiate a lower commission after receiving an offer.)
  • Will provide standardized documents, including short-sale agreements and offer acceptance letters.

More Information on Short Sales 

Foreclosure Alternative Program Fact Sheet

This article was reprinted from the NAR ( national Association of Realtors) Website .

www.Realtor.org

For More information please visit my website at www.CalWilliams.com


Mechanicsburg Realtor completes Technololgy Real Estate Training

January 4, 2010

 

For Immediate Release 

 Jan 2, 2010 As more and more consumers begin their search for real estate-related information on the Internet, it is critical that real estate professionals stay on top of the latest technology for the benefit of consumers and real estate practitioners alike. The e-PROÒ Technology Certification Program fills that need.

Realizing the importance of technology training, the National Association of REALTORS® (NAR) created a comprehensive Technology Certification course in 2000. And now that course, e-PROÒ, has been completely updated to include information on Social Media and Web 2.0 aspects that is, and will continue, to change the real estate business.

“The real estate industry has undergone a fundamental change over the past five years,” Calvin W Williams said. “Today, more than 85% of all buyers and sellers begin their search online. As an e-PROÒ certified agent, I have knowledge and tools needed to provide my clients with the information they need and the customer service they demand. It’s both hi-tech and hi-touch.”

The all new e-PROÒ certification course — the only technology certification program offered by NAR — is designed to prepare real estate professionals to make the most of Internet technology and to identify, evaluate, and implement new Internet business models. The elite group of course graduates represents only four percent of all REALTORSÒ in the country including Cal Williams of Straub and Associates Real EstateGroup.

The PROÒ certification course is an educational program unlike any other professional certification or designation course available, comprehensive and interactive. It is specifically designed to provide real estate professionals with the technology tools needed to assist consumers in the purchase or sale of a home.

The exclusive e-PROÒ certification course is presented entirely online and certifies real estate agents and brokers as Internet professionals. The course is designed to help REALTORSÒ stay at the leading edge of technology and identify, evaluate and implement new Internet business models.

Once completed, the e-PRO certified real estate professional joins the ranks of a special community of highly skilled and continuously trained professionals who provide high quality and innovative online-based real estate services.  Consumers can identify the e-PRO through the exclusive e-PRO  Internet Professional logo.

Both the content and the delivery platform were created by the San Diego-based technology company InternetCrusade®. Graduates use the skills they’ve acquired to provide clients information on properties for sale, local communities, and the local real estate market.

For more information, e-mail Cal Williams at cwilliams@homefindergroup.net or call 717-612-9901


November Homesale Numbers reported

December 29, 2009

Statistics recently released from the NAR  show existing homesales numbers up again. The article below is reprinted from www.cnnmoney.com.

NEW YORK (CNNMoney.com) — After surging 10% in October, sales of existing homes jumped again in November, growing 7.4% compared with October to an annualized rate of 6.54 million units, according to the National Association of Realtors.

“This clearly is a rush of first-time buyers not wanting to miss out on the tax credit,” said NAR’s chief economist, Lawrence Yun

November was originally going to be the last month in which sales to first-time homebuyers would qualify for a federal tax credit of up to $8,000. However, that deadline was extended through June.

In addition, the tax credit was expanded to cover people who already own a home. They can qualify for a $6,500 tax credit if purchase a new house before the end of June. That should encourage “trade-up” buyers.

The strength of sales in November surprised the industry. A panel of experts compiled by Briefing.com had forecast month-over-month sales growth of just 2.5% to 6.25 million from 6.1 million a month earlier.

The sales total was also a huge improvement over a year ago. Sales rose 45.7% over the paltry annualized rate of 4.49 million units during November 2008.

The contribution made by first-time buyers is evident in a separate survey NAR conducted of its members. They estimate that 51% of sales in November were by newcomers to the market, up a point from 50% in October. Normally, first timers account for about 40% of sales.

Also propelling sales higher were rock-bottom interest rates. The average for a 30-year, fixed-rate loan during the month was just 4.88%, down from 4.95% in October and 6.09% a year ago.

With rates that much lower, homebuyers can save more than $150 a month on a $200,000 mortgage.

The industry expects home sales to slacken December, partially because of the tax credit’s originally scheduled demise. That caused some buyers to push up their closing, stealing sales from December.

However, sales will not fall off a cliff, though, according to Walter Molony, a NAR spokesman. “The psychology seems to be turning around,” he said. “Potential buyers, who had been staying on the fence, now believe we’re at or near the market bottom.”

One X-factor, however, is the vast numbers of homes that may come to market over the next few months. There is a large “shadow inventory” — homes owned by banks and mortgage companies — that have not yet been put up for sale. It could be as many as 1.7 million units, according to First American CoreLogic.

In addition, another spate of foreclosures could be hitting the market as a number of option-ARM mortgages are set to default.

All that may drive prices down, according to Shari Olefson, author of “Foreclosure Nation: Mortgaging the American Dream.” And the impact of these renewed price declines could again alter the market psychology.

“People think that prices have bottomed,” she said. “I don’t think they have. People will see price declines and that will discourage them from buying.”

Mike Larson, a real estate analyst with Weiss Research has preached all through the bust that price declines are what will “fix” the housing crisis.

“We needed to see prices fall to make ownership competitive with renting again, and to restore the normal relationship of house prices to income,” he said. “That has now happened and you’re seeing buyers come out of the woodwork as a result.”

Still, they will have to come out in large numbers to offset the inventory overhang in some of the worst markets, according to Olefson. In the Florida condo market, for example, there is a 35-to-40 month supply of units at the current rates of sale, she said.

Prices still almost certainly have further to fall. To top of page


First Time Homebuyer Tax Credit – End of Year Review

December 20, 2009

The holidays are here and with them comes the end of the year. At the risk of putting a damper on the season to be jolly,  i thought now might be a good time to review the first time homebuyer tax credit. It has been a huge newsmaker this year and many people may be confused about the details.

Here is an excerpt from an article by the NAR ( National Association of Realtors .) This article is found on their website at  Realtor.org.

Who Qualifies for the Extended Credit?

  • First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
  • Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

If you purchased a home between January 1, 2009 and November 6, 2009, please see: 2009 First-Time Home Buyer Tax Credit.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by two additional factors:

  1. The price of the home.
  2. The buyer’s income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009,  single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you  purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

More info available at www.CalWilliams.com


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