Catching up on reading my day old Wall Street Journal this morning, an article on page 2 caught my eye. It said aspiring homeowners should have the upper hand this spring, but it doesn’t feel like a buyer’s market. Why? The WSJ quoted the CEO of Redfin saying that the mood of buyers was “nasty” because “customers just keep getting outbid on the houses that they want”.

The article mentioned a woman who sold her home in Redondo Beach in a month, but got outbid on four homes at a lower price point in Eagle Rock. Some sold to buyers for all cash. Another buyer, who only has a 3 1/2% down payment with his FHA loan, is at a disadvantage against cash buyers and was quoted as saying “It’s a false buyer’s market. If you think prices are cheap, wait until you start putting offers in”.

Attractive inventory is limited. A lot of it is mundane and pedestrian, requiring imagination and creative juices to meet today’s expectations for style, design and functionality. So when a sharp property comes on the market, multiple offers can come in, and the “highest and best” offer not only will be a higher offer, but will also be one with a big (or all) cash down payment.

There’s a Fannie Mae owned townhome in Port Hueneme that’s a screaming deal – and I don’t have a buyer for it. It’s a two story, almost 1,600 sq. foot 3+2 with a 2 car garage, all new carpeting and paint for $210,000. It’s with seller financing of 3% down, NO mortgage insurance and Fannie Mae pays the closing costs – sweet!. A buyer would need to come in with just $6,300 cash. So – why is buying this home cheaper than renting? Here are the numbers.

Read the rest of this article »

Lenders are looking for ways to way to minimize risk and fraud and ordering that pizza might make the difference in getting that loan!

Data mining companies are used by lenders to gather different types of information on the borrower. One type of data collected is address verification to compare where you have your pizza delivered to see that it matches the address on your loan application!

These companies gather the available information from different sources and avenues to glean snap shots of a borrowers credit-worthiness. A lender once told me that he looks for 2 things when considering lending to a borrower – not only their ability to pay, but their willingness to pay.

Read more detail in the LA Times…

In an effort to cut down on fraud by borrowers and tighten underwriting criteria, lenders will require a second full credit report just prior to closing escrow. This is part of Fannie Mae’s “loan quality initiative” (LQI) which takes effect June 1st.

Lenders are concerned that  mortgage borrowers shop for things they need for their anticipated new home – often furniture or even a car – possibly thousands of dollars worth of purchases . The home buyer often will open up a new credit account, thus affecting the borrower’s debt-to-income ratio.

What should a home buyer do? The rule of thumb is – abstinence, resist the spending until after escrow closes! Read Fannie Mae’s FAQs on this topic.

Each Thursday, the California Franchise Tax Board updates the numbers for credit availability. Escrow must have closed before a home buyer can submit for the credit. Here are this week’s numbers!

OPM means Other People’s Money and it’s a great scam if you can figure out how to do it. You get the glory and someone else pays for it – sweet! Well, a number of developers figured it out. When a developer builds out their homes or condos, they can insert into the covenants and/or deeds a requirement that when the property is sold, a fee must be paid to the  developer’s charitable foundation.

The Lennar complex of condos (between Telephone Rd and Thille, a couple of blocks west of Victoria) has such a deal. Looking at a previous deal we did there, $202.50 went to the Lennar Charitable Housing Foundation. This scam is getting so prevalent that the Residential Purchase Agreement we Realtors use in submitting an offer just added a line item under “Other Costs” called a “private transer fee” for just this sort of thing.

Wanna start your own foundation? Just build some homes!

The California Association of Realtors stated that military personnel have an extra year, through June 2011, to buy a principal residence in the U.S. and claim the federal tax credit.  The deadline for entering a binding contract is April 30, 2011; the deadline to close a purchase is June 30, 2011. The extension applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.  All other home buyers must be under contract by this Friday (April 30) and close by June 30 to qualify for the federal tax credit.

Curious about what minimum credit score you need or how much of a down payment you need to buy your personal home or perhaps an investment property? Here’s Fannie Mae’s newly updated eligibility matrix.

If you’re not actively looking to buy, you won’t notice that interest rates appear to be creeping up. But if you’re in the market (or thinking about it)  it’s good to understand what drives interest rates. This past Wednesday was a very important milestone for mortgage rates. Why? Read the rest of this article »

If you’re a first time home buyer and have been sitting on the fence – this will blow you over and get you going! You’ve known about the $8,000 first time home buyer federal tax credit.  But now, Californians  can take advantage of newly enacted AB 183 allowing up to $10,000 of additional tax credit! That’s $18,000! This is huge! But there are time lines and the tax credit is on a first come, first served basis. Want to know more? Call us now at 659-2000!