Avoid Real Estate Loan Problems

     During many transactions there are always a few different areas that will make the closing process a nightmare.  The single one category that has made my clients purchasing a home miserable is not the seller's counter offers, not problems reported during the home or pest inspection, not being able to cover closing costs.  The one item that creates the most problems before closing is the loan process.  When I meet with a new client we'll sit down and review what type of house they want to buy and the monthly payment they desire to help create a criteria to find the right home for them.  Then comes the question about if they are prequalified and if so with which lender and loan officer.  What comes next is at times worrysome.  It's when my client's say they been preapproved online or the loan officer is a friend of the family or they found the loan officer browsing through the internet. I'll take this opportunity to explain how important it is to have a good loan officer who can make things happen when it counts. Your loan officer should closely review your background while getting preapproved. All possible sources of amiguity should be resolved during the preapproval process.  Then when your offer has been accepted and the loan is being reviewed by the underwriter for full approval your loan officer will not come back and ask for new documents or bring up possible problems that may stop you from buying your dream home.
     Although it is important to select a good lender, it is the loan officer that will make getting the loan a smooth process or a living nightmare.  There are three or four loan officers that I will refer to my clients.  One of my criteria is that the lender is a direct lender not a broker.  A broker will go out and look for a lending institution and get the loan from a secondary source.  Because the loan is being approved external to the broker's office they have little control over the loan approval timeframe. A direct lender loans the money through their institution and will have the entire loan approval process completed in their office or by underwriters located at a central office.  It's the loan officer who is not afraid of telling you of possible problems at the beginning of the process that will make getting the loan less stressful .
     So when selecting a lending institution for your loan, get a referal from some one who has already had the experience working with the loan officer.  Or ask your Realtor for a referal, it is best to choose the loan officer who will work hard for you at the beginning so the loan process is not a problem when buying your dream house.
     For questions regarding preapproval and preferred lending institutions please contact me via email or you can call:

David Soldwisch
PMZ Real Estate
Lic: 01860247
(209) 612- 7737
dsoldwisch@pmz.com

Buying a Flipped Property

     In today's market there are basically two different types of investors who flip houses. The first is one who buys a property with the idea of doing a little as possible to the property before putting it back on the market. Although the investor has done as little or nothing in preparation for the sale they still expect a maximum dollar for the house.
     Then you have the investor who  has formed a LLC, Limited Liability Corporation, and has access to contractors who are ready to make the repairs quickly and efficiently.  After the property is purchased they will have an inspector go through the house and make a list of all required repairs to insure it is in good condition before putting the house on the market.  They too want the maximum dollar for their investment. 
     In both of the above cases the properties will be put on the market for the maximum market value.  When showing houses that are being flipped I am weary of the first type of investor. These properties have a higher chance of hidden problems for the buyers.  Fresh paint may hide potential problems of moisture build up around the windows or a recent roof leak.  It is easy to determine which type of investor is selling the property by looking at the quality of repairs and what has been fixed.  In the case where you have a "want to be" real estate investor I make my clients aware any potential or hidden problems.  In the second case it is much easier to recommend the property to a client as long as they realize they will be paying top dollar for the house.  Paying the higher market value is not always a bad thing if you are getting a quality product that is move in ready and will require less maintenance in the long term.
    So it isn't always bad to purchase a flipped home for the upper market value if it is in top condition.  Would you not pay top dollar for a house from the original owner if they kept it in great condition?  In most cases it is a psychological issue with the buyer knowing some one is making a profit with an investment verses their home.  It is okay to pay the higher market value as long as you are getting what you paid for and not a lot of hidden problems.

New HARP II Guidelines (Cont.)

According to the latest update about the new HARP guidelines on various real estate websites it looks like the revised HARP will not be ready until March or April of next year.  Currently the government has sent the rules and regulations to the banks.  The servicers who have Fannie Mae and Freddie Mac backed loans are required to participate in HARP.  However you do not have to use your current lender to do a HARP refinance.  If the loan is not backed by Fannie Mae or Freddie Mac the lender does not have to participate although they are encouraged to do so.  It does appear that it would be advantageous for the banks to modify more loans to save money from the foreclosure process.  A new update will be sent out when any news is released.

New HARP Guidelines

The federal government has introduced a new Home Affordability Refinance Program (HARP) that gives hope to some homeowners who did not previously qualify for the original HARP program. The HARP program that was introduced in March of 2009 would only assist home owners who did not owe more than 125% more than the current value of their house.  This limitation has been removed with the new program.  Don’t rush out and ask your lender if you qualify for the new HARP program as the FHFA will not release all the new guidelines to the banks until after November 15^th.  It appears there will still be limitations of how the new program will work since it is expected to only help approximately 1.8 million borrowers.  However if you are one of those homeowners it will be worth looking into.

            I will submit another blog with the details of the new program once it is posted to the public. If you or any one you know would like assistance with a better understanding of the new guidelines give me a call, (209) 612-7737, and we can review your situation together.

More than a Realtor

I feel that the real estate proffession is becoming more diversed than in the past.  A couple of weeks ago my wife gave my contact information to one of her friends at work.  This person was in the process of a short sale on her primary residence.  My wife's friend had the intention of renting the house back from the buyer which is a common desire.  But her Realtor did not tell her that the bank would not allow this and the she would have to sign a notorized document stating that there could not be any contractual agreements between the buyer and seller of the property. My wife's friend found this shocking news only two weeks before closing. This is where I come in; after discussing the options with now our mutual friend I found out what rent limitations she had started calling my investor contacts. After arranging two meetings my new friend found the perfect house for her family.  With only eight days before the family of five had to leave their home they signed the lease for their new home.  I am not a property manager and do not normally spend my time trying to locate a rental property for my clients.  But when a family with three young children are in need of some one to help them I am compelled to do what I can to make their lives a little easier.
During this time when so many people are desperate and at times confused, I believe it is important to take time out of a normally busy day and try to assist them when possible.  This will at times change my title from Realtor to property manager, mover, or loan modification assistant.  Although there is no financial compensation I do find that at the end I have friends for life.