Posts Tagged ‘Wilmoth’

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Caution Needed!

Friday, March 8th, 2013

scammerOK, people…please, please, please.  When looking for a home to buy or rent, use some caution.  Particularly if you are considering buying a home on a land contract or a rent to own program.  This should be old news by now, but until these cases cease it has to be repeated.   DO NOT WRITE A CHECK FOR A HOME UNTIL YOU DO A LITTLE RESEARCH!  Yes…people are getting scammed.  It happened again and we get a phone call every week from somebody asking why the ad they found on line for a home was placed by somebody other than the Wilmoth Group.

The usual scenario is scammer finds a vacant property and markets it on some inexpensive advertising platform.  Interested party calls and sometimes they are given the lockbox code (troubling) and sometimes they actually meet the scammer and are shown the property (even more troubling).  Most of these scammers are NOT licensed or Realtors, but they probably had a Realtor give them the access information by pretending to be interested in the home.  So, Realtors, please stop just giving out lockbox codes to strangers because you are to lazy to go show a home!  You may be unintentionally contributing to a scam!

So, lets say as an interested party for purchase or rental, you do want to make a deposit or provide earnest money.  Here is a checklist of things to do to make sure you are not scammed.

If a person states they are a Realtor or licensed agent, confirm with the state licensing board, real estate board, or even the company they claim to work for. 

Most of these scammers seem to indicate they work solo, so checking on licensing is a smart first step.

Type the address into a search engine on the web and see if other listings come up for the home.  If so, call  and inquire and see if it is the same people.

Deposits and earnest money should not be made payable to individuals.  If you are asked to write a check to an individual, do a lot more homework.

If things seem really suspicious, check the local tax records and locate the name of the owner per these records.  Test the agent’s knowledge or even better, attempt to confirm with the owner that they are selling or renting their home with the person you are dealing with.

Do not accept funds from the person you are dealing with in an arrangement to return those funds to them.  These scams are elaborate but you will end up ripped off…promise.

Do not send funds to a person claiming they are the owner of a property without using every method in the book to actually confirm that they are the owner.  Tax records, picture ID, utility bills…there are many ways to connect the dots!

I am getting sick of these scammers and would like to preach caution to all.  If things do not appear right, they probably are not.

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Posted in Buyers, Fraud, Issues | No Comments »

Mortgages In Real Time

Monday, January 7th, 2013

walmartA  study focused on consumer attitudes about home ownership was released last month.   The focus was centered on the mortgage application process.  The big headline from the study was that 1 in 3 consumers stated they would consider obtaining a mortgage from Walmart.  The headlines seem to blare that this was quite the revelation…33% of people would consider a Walmart mortgage!  My thought was…why so low?

Later in the study, the focus turned to consumer frustration with the mortgage process.  Beyond the usual complaints about interest rates, taxes and escrow…the main issue is execution of the process.   Slow execution.  I agree totally.  Why does it take 4-6 weeks to obtain a mortgage?  In the 1980′s I would not have questioned that it takes so long for the paper to flow through the process.  Today, I can’t figure out why the mortgage industry has not trimmed this time line.  I have been involved in the world of real estate finance since the 1980′s, and I venture to say it takes as long today to close on a mortgage as it did in 1984 when I purchased my first home!

Lets contrast this with the second biggest purchase most people make.  Over the holidays, my daughter was home from college and we needed to address her driving situation.  After she did her shopping, she selected a nice used vehicle from a local dealer.   I negotiated with the dealership by email until a deal was struck.  About two hours later we went to the dealership, completed some paperwork, and within an hour, drove away with the car and a car loan.  I can make a case that this car loan is much more risky than a mortgage.  Yet, all the underwriting and documentation can be completed in one hour!

Any wonder the mortgage industry has a problem with consumer satisfaction?

When you think of Walmart you think of low prices first.  Convenience..maybe second.   Much of Walmart’s success is based on speed though.  Quick inventory turns are a part of how you keep prices really low.  Does anybody not think Walmart (or any non-bank) mortgage provider could not speed up the approval and funding process?  I can hear the banks now…they believe we are willing to take a longer journey for that mortgage due to the professional, personal service we receive.  Stop me from laughing please!  This study says 56% of its participants are laughing with me.

The final conclusion of the study is that consumers want price, service and trust.   Service means not waiting 3-4 weeks to find out if you are approved.  I can name several non-mortgage companies that can offer all three of these benefits if they chose to commit to offering mortgages.  The question left is who will challenge the banks model first?

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Posted in Buyers, Financing, mortgage, Private Lenders, Underwriting | No Comments »

Multiple Offers

Friday, October 5th, 2012

One of the major improvements in selling bank owned homes over the last five years is the systematization of the multiple offer scenarios.  So many agents in the past insisted that they be told how many offers a seller had received…like it was a right that existed for the buyer.  There also was a belief that the first offer submitted was the only one a seller could respond to before moving to another offer.  Both of these beliefs were wrong..but I still run into them today.  Usually, it is a misinformed buyer who is confused by the process because it was not adequately explained by their agent.

The Multiple Offer dialogue begins and ends with an understanding that disclosure of any other offers is only to be done by a listing agent when given that permission as part of their listing or other written agreement.  It is not a violation of the Code of Ethics to decline such requests from other agents.  In fact,  Article 1, Standard of Practice 1-15 of the Code of Ethics of the National Association of REALTORS®, requires that listing agent disclose the existence of multiple offers ONLY with the seller’s approval.   An addition to the Code of Ethics in the last few years added the following requirement: Where disclosure is authorized by the seller, REALTORS® shall, if asked,  also disclose whether the offers were obtained by the listing broker, another licensee in the listing firm, or by a cooperating broker.  For a buyer or agent to expect this information is not correct.  A seller must authorize it.  Most of the bank sellers now authorize, with a certain set of procedures for how disclosure of multiple offers are to take place.  Please remember these are not laws but pledges anybody who is a Realtor is expected to conform to as part of a Realtor Code of Ethics.  You may be working with a licensee who is not a Realtor.  In that case, these same ethical duties may be ignored.

Educating your buyer is the best thing to do about this process.  It is a very common part of the bank owned home purchase process.   It should not cause buyers or agents to shy away from making an offer on a property.  A good understanding of the process, with expectations set accordingly, will result in the best experience for all.  The most important thing for a buyer to understand?  A low offer may never have a second chance.  Sellers often select the most competitive offers and allow them a “highest and best” period to submit one more offer.  There is no requirement that every submitted offer will receive this opportunity.

The National Association of Realtors has published an excellent guide for Realtors to use when advising sellers and buyers in multiple offer situations.  Click here to download “Presenting and Negotiating Multiple Offers.”

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Posted in Buyers, Buyers Agents, Good Offers, Offers | No Comments »

HUDHomestore.com Gets An App!

Monday, August 20th, 2012

We all have them on our phones and tablets to use for all kinds of ways to make life easier.   Now, if you own an I-phone, and want to search HUDHomestore for homes, there is a simple, easy to use app, available for free!  Hopefully the folks at Yardi Systems won’t forget us Android users !

I-Phone users can check it out at:

http://itunes.apple.com/us/app/hudhomestore-mobile-search/id548008055?utm_source=WhatCountsEmail&utm_medium=HUD%20Homestore%20App&utm_campaign=HUD%20Homestore%20App

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Posted in HUD, HUDHomeStore.com | No Comments »

Don’t Do This Before Applying For A Home Loan

Tuesday, May 15th, 2012

When we work with first time buyers, we do everything possible to counsel them as to what to expect in the home loan process.   Getting approved for a loan is one of the scariest, and most exciting, parts of the process to a first time buyer.  Yet, in their haste to purchase a new home, many home buyers (not just the first timers) will open themselves up for scrutiny that will make the lender seem like Satan’s brother.

One of the most basic pieces of advise…no new credit cards!  Yes it is tempting to be offered six months same as cash when you are purchasing that new sofa, but it involves applying for credit and a new obligation.  Most home buyers hate the idea of waiting to start shopping for furnishings but they really need to execute their mortgage before messing up their credit scores and debt load.  In fact, first timers should probably take as many hand-me-downs as possible until they get comfortable with their new monthly payment.  It is still rather easy to finance major purchases and before you know it, you will have so many payments that you will lose sleep at night!

If somebody is going to gift to you the down payment funds, get a gift letter from the lender to use and document the receipt of the funds correctly.  Lenders will request 3-6 months of bank statements and when they see that large deposit of cash, they will want you to provide documentation.  Make sure if you have a recent large one time deposit, you will apply toward a down payment, that you can document it.   If it is not possible to explain (you found the money, you have gambling winnings, you stole the money) you will find this issue to be a big sticking point for your mortgage.

Many bank owned properties today are for sale to only owner occupants for a period of 15-30 days after first coming on the market.   Unfortunately, we are seeing prospective buyers who are thinking they can sneak around these rules based on some technicality.  Unfortunately, many are guided by uninformed, inexperienced agents.   If you own another home, you will need to document that the one you are bidding for will be your home.  Not that the other home you own is going to turn into a rental and you are now going to drive an extra 50 miles to work.  Lenders are not that stupid.  I have even seen cash buyers get caught up on this one based on the location of their employment.  Better really be able to prove that you work remote and do not be surprised if the lender asks for a letter from your supervisor!

Not so long ago, lending standards were more lax and a lot of borrowers could say just about anything and not have to provide proof.  We all have seen how that worked out and nobody is going to allow us to get back to those standards anytime soon.  Be prepared for your lender, and don’t give them any reason to doubt you!

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Posted in Buyers, Financing, mortgage, Underwriting | No Comments »

The Difference Between Success and Failure In Selling HUD Homes

Thursday, April 26th, 2012

The HUD home sales process is different but once you understand it you will realize it is logical and easy!  You will want to work with buyers who are interested in buying HUD homes.  If you don’t invest the time in learning how to successfully sell homes…well you might end up like the agent in this video.

 

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Posted in Buyers Agents, HUD, HUD Sales Procedures, Selling Process | No Comments »

Is A HUD Home Available for My Buyer?

Wednesday, March 14th, 2012

Most HUD homes have an exclusive period for owner occupants that lasts 30 days.  The exception are the properties with uninsured status.  These have a five day exclusive period.  The way to know if your buyer qualifies is to look at the listing at HUDHomestore.com and see the Eligible Bidders category for the listing.  This will identify whether the property is in the exclusive period or if it has been opened to all bidders.  Then look at the Period Deadline date to see when the last day of the exclusive period will be.

Here is a screen shot from HUDHomestore.   Please use this easy method to determine if a HUD home will work for your buyer type.  You can click on the image in order to see a full size view.

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Posted in Buyers Agents, HUD, HUD Sales Procedures, HUDHomeStore.com | No Comments »

HUD Sales Contracts-Can You Amend Them?

Wednesday, February 29th, 2012

After your HUD sales contract has been approved/ratified by HUD, it is a contract with terms to be honored!  I am still surprised at the number of sales agents who think these contracts can easily just have an amendment attached and keep the deal alive.  The reasons amendments and changes are needed are many.  Lets just get out on the table immediately, what is a “deal killer”…ie NOT amendable on these contracts.

·         Sales Price

·         Primary purchaser

·         The amount of earnest money

·         Closing Cost concession

·         Net to HUD

·         Sales agent commission paid by HUD

·         Purchaser’s  Social Security Number

·         NAID Number used by Broker

·         Moving from Investor to Owner or Occupant or Owner or Occupant to Investor

Recognizing that there are some issues that come up that do not break the spirit of the agreement, HUD does allow some items to be amended.  First, go to the site of the HUD Asset Manager assigned the property to find the appropriate Amendment form and instructions.

  • Financing type can be amended from FHA to conventional or cash or can be amended from Cash or conventional to FHA if the property is eligible. A lender letter or proof of funds will be required to make the change.
  • Additional purchasers can be added but at least one primary purchaser must remain on the contract.
  • Amount of the repair escrow can be amended for a 203B loan with a repair escrow.  Supporting documentation must be provided with the amendment.  These repairs may not exceed $5500. (actual repair escrow maximum of $5000 with 10% cushion allowance for a total of $5500)
  • Address corrections can be requested – with supporting documentation.
  • Closing Dates can be extended through the extension request process.
    • Broker and purchaser must sign extension request form (found at Asset Manager’s website).
    • An Extension fee is required and must accompany the request.
    • A lender letter or current proof of funds must accompany  the request and fee.
    • All three items are to be delivered to the closing agent. The closing agent will accept only if all three documents are received five business days prior to the expiration of the contract term.

A couple examples of real requests received for HUD contracts..and the result of the request.

If the bid states the purchaser is the Owner Occupant, this means this home will be their primary residence to be occupied by the purchaser for 12 months and the purchaser has not purchased another HUD home as an owner/occupant in the last 24 months.  This status CAN NOT be changed and if needed, the contract will be cancelled.   Even if the lender underwrites the loan for the owner-occupant as an investor loan, the contract will be cancelled.

Finally, HUD does not allow contingencies (ie inspections, home closings, cashing a big check etc.).   A HUD contract is a contract with limited ways that it can be amended.

These are just the rules of the game.  We do not write them.  We do want you to understand them.

 

 

 

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Posted in Contracts, HUD, HUD Sales Procedures | 3 Comments »

Real Estate Tax Affects A Very Small % Of Transactions

Monday, February 20th, 2012

It must be Spring (or close to it) because my inbox is filling up with claims of all kinds of things, from people who lost their wallets in Spain and need me to wire them funds, to an incredible number of dating websites with singles waiting for me to join (how much do they really know about me if I get these?).  The one that is being forwarded commonly in the last few weeks, that causes a high level of concern by anybody involved in real estate is the message that starting next year, all real estate transaction will carry a 3.8% transfer tax as part of the Obama health care law.

As much fun as it might be to debate whether real estate transfers or transactions can, should, or will ever, be taxed…this is not the Great Satan that you should lose much sleep over.   The facts are this transfer tax applies to the so called “wealthy” earning $250,000 or more jointly or $200,000 as an individual, if the sale of a house produces a gain of $250,000 (filing single) or $500,000 (married filing jointly).  Even if the gain falls under these qualifiers, there are additional considerations that involve the household’s tax situation.  Keep in mind, this tax also only applies on principal residence sales after the $250,000/$500,000 gain exclusion.

I know taxes get everybody in an uproar when they potentially apply to their own interests.   Housing affects a significant portion of the population so this tax does get people upset.  Just please understand who needs to be upset and who likely will not be affected.  Here is a link to an article the National Association of Realtors have posted.  Also, if you want a deeper understanding, a down loadable brochure has been made available.

 

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Posted in Investors, Taxes | No Comments »

New! How To Locate HUD Home Bid Results

Wednesday, February 8th, 2012

HUDHomestore.com offers a new feature that selling agents and home buyers are going to want to know about!

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Posted in Buyers Agents, HUD, HUD Sales Procedures, HUDHomeStore.com | No Comments »

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