New Business in the Making

I’m w0rking on a new business model for real estate purchases and sales and will post news soon.

Real estate commissions (continued)

The way I run my business is by saving money on fees for real estate transactions while making my business more consistent and efficient. This way I am able to pass the savings on to you, buyers and sellers. More details will follow.

Are real estate commissions fair?

The hot topic in real estate industry is whether the commissions that real estate agents charge for their services are fair. For many years agents assisted buyers and sellers in facilitating purchases and sales of real estate. It is a valuable service and the one that consumers cannot do without. Real estate brokers are trained professionals that deal fairly and ethically with all parties, since they are regulated by department of licensing and other professional organizations and government laws. Having a real estate broker represent you in a purchase or sale is like having an attorney represent you in court. Real estate professionals make sure that everything is done according to laws that regulate purchase and sale of real estate. They are responsible for knowing the requirements and regulations and guiding clients to ensure a fair deal and disclosing possible pitfalls and potential problems to avoid. Real estate agents are responsible for marketing properties that they sell and generating buyers.

In the past, Multiple Listing Service information was only accessible to real estate brokers and was in a form of a book. Agents would review this book for new listings and show them to the clients. It was perceived that agents were doing a lot of advertisement and that’s why they were worth the commissions they were charging. Lately, Multiple Listing Service became available to general public for searching the properties and even posting your home for sale without using an agent. This service is much cheaper than listing with a broker, but there is no marketing provided, other than Multiple Listing Service distributing information of the home for sale to all real estate web sites that agree to the rules and regulations set. Suddenly, new homes for sale could be visible on very many websites online without any special knowledge or skills of a seller.  This change forced many agents that did not know how to market and sell a home go to really low commissions. They started buying clients through lower fees, without providing much service to even justify the lower fees. Customers however felt the pressure on their own incomes and did not understand why in the midst of decreasing incomes from middle income families agents would keep charging high commissions.

7 loan officers arrested for fraud in Bellevue

Yesterday, 7 loan officers were arrested in Bellevue for committing loan fraud. Supposively, they made fradulent loans on properties that were not worth as much as they lended. Loan officers benefitted from the difference and bought more homes and condos, Lamborghinis, BMWs, Lexus, and Range Rover that were all confiscated. It is no doubt that these loan officers were doing shady business, but I am not too sure if they allegedly committed loan fraud. It remains to be seen if they will be found guilty of the charges. I know another man who has been in prison for supposive loan fraud, where noone was harmed, not even banks, and there was no alleged crime committed. Our state prosecutor was just stupid jerk, who decided to convict this man just on the basis that over a million dollars had been spent on investigation and it would not look good if they did not sentence anyone to prison time. In the end, the man who has been helping people buy and sell homes spent 13 months in prison. This is an example of state abusing their powers. Regarding the 7 loan officers, it remains to be seen if they are found guilty of committing fraud. All I know is that this case will make it hard for honest russian speaking people do business for a while. Another thing is clear is that this case tarnished the reputation of Slavic churches in Puget Sound, since some of these people go to russian churches. The moral of the story is that we need to be less selfish in our actions and be mindful of others. More information will follow.

Condo purchases will require 10% down

Starting mid March, condo purchases will require 10% down payment. This is a measure that banks are taking to limit foreclosures. Unfortunately this is not the best news for home buyers. If you are looking to buy a condo, please hurry and buy one right away. otherwise, you will need a big down payment soon. Let me know if I can help you in any way.

Breaking news: Government assumes control over mortgage giants Fannie Mae and Freddie Mac

This just in on Sunday morning, government took over Fannie Mae and Freddie Mac, to rescue these financial giants from bankrupcy. These are the two biggest investors of money in our real estate market.

          When buyers get home loans, banks sell these loans in bulk to large investors such as these two. Fannie Mae and Freddie Mac turn around and package these loans into bonds and try to sell them on international market. When many loans in the bundle are bad(in default), it’s impossible for those bonds to be sold, as noone is interested in buying them with really low returns and high risk. Then we have limited money to borrow. In order for us, the consumer to be able to borrow money, government is trying to save these two biggest investors. Read the details of this takeover by clicking here.

What interest rates really mean

The Fed did this! The Fed did that! Rates are up! Rates are down! Aaaagggh! Okay, now exhale.  In turbulent economic times the media can’t wait to report what interest rates are doing.  Pundits prognosticate, forecasters forecast and soothsayers sooth.  When should you buy a home based upon interest rates and when is it the right time?

The fact is that interest rates, while important, have little impact when it comes to buying a home.  Alright, alright, I’ll admit: it’s important…but it’s not a deal-killer.

There is a fixation on what rates are doing.  A fixation on what rates will be in the future and what rates were in the past.  I’ve heard potential home buyers tell me, “I’m not sure I want to buy now because rates are ¼ percent higher now and I think I’ll wait.” I say,  “Wait for what?”  I say let’s not look at the rate but instead concentrate on what that rate actually represents … your monthly payment.

Let’s look at what an interest rate move of ¼ percent really does to a $200,000 mortgage.  Say a 30-year interest rate at 6.00 percent “jumps” to 6 ¼ percent. Shall we sit on the sidelines, thinking such a move is suddenly unaffordable?  No.  The payment on a $200,000 loan “jumps” by about $32 a month!

Now let’s get a bit more draconian and look at a ½ percent increase and the monthly payment increases by $64.  Putting that into daily financial terms, $64 is about a tank of gas. While not insignificant, it’s hardly a reason to stay on the sidelines of home ownership. Right now, buyers should have more urgency than ever. Home prices have declined enough to make buying more affordable than it’s been in recent memory and interest rates (whether at 6 percent or 6 1/4 percent) are historically low. It’s time to act.

Are rates important? Sure they are.  But are they the end-all?  Heck no.  Interest rates over the past few years have been in a very tight range, with few major swings.  Just remember what interest rates represent, your monthly payment, and pay less attention to the headlines.

Overcoming the misconceptions about the “credit crisis”

You’ve watched the news and read about it in the papers. You know, the “credit crisis” and how buyers need 20 percent down in order to buy a home? And even if you found a buyer with 20 percent down, lenders aren’t making loans anyway. So, why bother, right? Wrong!

We’re right smack in the middle of what just might be the biggest disservice ever perpetrated on potential home buyers.  It seems the press just can’t get enough of all the gloom and doom in the housing industry.  The fact is that mortgage money is as available today as it was a year ago and loans are being made this very moment with little or no money down. And, no, platinum credit isn’t required.  You just need to know where to look.  Who are these lenders? They’re right down the street.

 

Federal Housing Administration (FHA) loans are exploding onto the mortgage scene; recent estimates are that one out of five mortgages are FHA loans. FHA loans never went away, their reemergence is a result of the collapse of the sub-prime market. FHA doesn’t technically have a minimum credit score, although, in practice, lenders won’t approve an FHA loan with a credit score below 500. But that’s a far cry from the notion that an 800 score is the only thing lenders care about.

The best part?  FHA only requires 3 percent down. 3 percent. And that 3 percent can come in the form of a gift or grant.  FHA borrowers only need to have $500 in a transaction.  All the while, FHA mortgage rates are as good or better than their conventional counterparts.

Low or no down payment, extremely competitive rates and easier qualifying.  No wonder FHA is moving up the charts!

Please contact me if you would like more information about FHA loans or help getting into your first home.

Master Builders Association sponsores Buy New, Buy Now Tour

It’s the perfect time to take the Buy New Buy Now Tour, April 19 to 20 and April 26 to 27 from noon to 6 p.m.

Sponsored by the Master Builders Association of King and Snohomish Counties, this tour represents some of the area’s finest new home construction in all price ranges. Whether you’re in the market for a new single-family home, condo or townhome this special free event will help you get an idea of our area’s exciting array of housing opportunities. It’s also a fun and easy way to give you ideas for the home you plan to build and maybe, find the builder that’s right for you! Contact me for the details or click here to visit Master Builders Association site.

Urban Living will concentrate on Seattle and Bellevue

As I shift my business towards Seattle and Bellevue, so will the posts be about these cities. Snohomish county has experienced a decline in the demand for housing, and when the demand goes down, so do the prices. It is definitely a great time to buy. The selection is fantastic, and the prices are good too. They’re certainly better than a year ago. Currently I have a few short sales available. A short sale is a sale, where the buyer gets a great deal on the home they buy, and the bank looses some money. It is my responsibility to negotiate with the bank and see that they will agree for this type of sale. This is similar to reposessed properties, where you as a buyer get a great deal. For a seller, I can help you avoid the foreclosure and deficiency judgement. Please visit www.NWResidences.com to see the list of homes I have listed for sale. Let me know if you’re interested in taking a look at any of them, or if you’re in financial trouble and you need my help of avoiding foreclosure. Thanks a lot.