Dawn Rivera’s Fremont & East Bay Real Estate Blog

Planning to buy a bank owned home with a FHA loan?    I recommend that you apply for the 203K  loan.  I am a realtor and have recently had two different clients use a traditional FHA  loan.   They were both planning to completely remodel the homes and so wanted to waive the inspections so they could close faster and be able to complete the work themselves, that way they would not have to pay labor expenses to a contractor.  The FHA appraisers came out to appraise the homes.  Both homes were in Hayward Ca., both were bank owned and there were two different appraisers.   One appraiser said that since the buyer waived the termite, roof and home inspections, they would recommend to fund the loan and let the new owner complete any remodeling at their own expense.  The other appraiser said that even though the buyer had signed an inspection waiver andcompleted an addendum stating that they were buying the home in as is condition, and waived all inspections including termite, roof and home inspections, the appraiser would not recommend funding until all inspections were completed and there was a roof and section one clearance.   The seller (bank owned)  said they would not allow any work to be completed by the buyer because of liability issues and the buyer did not want to pay a large sum of money for repairs on a home he/she did not own yet.   The seller was concerned that if they put money into a home before close of escrow the buyer may walk away.   A Catch 22!  If we had gone with the 203K loan we could have done a hold back.  The loan could fund and transaction close with escrow holding back from the seller the funds to complete the repairs. 

Lesson learned!

In the past I have allowed the seller (the banks agent) to choose the escrow.  Although it’s the buyer’s right to choose in Alameda County.  Why you ask?  Well because the bank has said they woulod pay all the escrow and title fees.  I have found thought that even if you put it in the car contract they don’t always pay.  Also whne your client is buying a home in alameda county and the escroe and title companies (plurl) are in bevery hlls 90210 it makes for a much more complicated and expensive closing, with extra fees for a traveling notary.  So, lesson learned, from now on my clients will pick their own escrow not the bank!

The Federal tax credit is nearing an end, and the state tax credit is just begining.   You have to be in Escrow by 04/31 to receive the Federal tax credit.  You have to close escrow after 05/01/10 to receiev the State credit.   The homes in alameda county have gone up 28% , One of my homes went from a value of 380,000 to 480,000 in the last year.  So to everyone who is waiting and sitting on the fence I say you better get on the ball and get off the fence.  The prices of homes are going  up and so are the interest rates.   Don’t miss the boat on the low rates and low prices!!

With all the foreclosures and short sales going on, and all us Realtors trying so hard to help our clients, it amazes me how the banks try so hard to be as uncooperative as possible.  My latest experience in this involved a listing that I had been trying to sell for so long it turned out to be a record in our office!  My client had just lost her job and could no longer pay the mortgage payments.  I rushed to get a buyer so she would not foreclose.  We get into escrow all the inspections and FHA requirements have been passed, the buyers has signed the loan docs.   The seller has signed off the house……..We cannot get chase to send the payoff demand to escrow so we can close.   I requested the demand again and again by phone after the title and escrow company had sent in a written demand and got no response.  Every time I called I was on the phone with them for at least 40 mins. and 30 of those mins. I was on hold!  I asked to speak to a supervisor and was told there were none I could talk to.  Over and over I got various customer service reps. who told me they were very sorry it has taken so long and they would fax it to escrow in 24 to 48 hours…to no avail.  Mean while they were calling my client three times a day demanding to be paid, while the whole time I was calling three times a day trying to pay them.    I finally had to find the main number for chase in New York by looking online.   I called and was told by the executive resolution dept. that I would need to talk to the attorney that was assigned to the loan. ( you would think that after I had called 15 to 20 times that someone would have told me I needed to talk to the attorney????? )  Well, I called “customer service” back up asked to be given the name and number of the attorney assigned to the loan and low and behold I was given a name and number.  I called said name and number and was e-mailed the payoff  demand right then.   I don’t know, but I would think the banks would be more cooperative when someone is trying to pay them???

A spurt in home sales in 2009, aided by low interest rates and the first-time home-buyer tax credit, has led some economists to forecast a turnaround in the housing market this year.

Among those who see improvement in the 2010 market is Lawrence Yun, chief economist for the NATIONAL ASSOCIATION OF REALTORS® (NAR). Yun hopes that the extension of the first-time home-buyer tax credit will provide a new pool of buyers to absorb the additional foreclosures that will hit the market this year.

He expects existing-home sales to rise 13.6 percent in 2010; home prices should go up 3 to 5 percent, with wide geographic differences. The average rate on 30-year fixed mortgages will range from 5.3 percent in the first quarter to 5.8 percent by year end. This forecast assumes there will be no major economic surprises. The weak job market remains a concern.

The Mortgage Bankers Association (MBA) has a slightly different take on the 2010 housing market. MBA predicts existing-home sales will increase approximately 11.2 percent. Interest rates should be about 5.6 percent by the end of 2010. The unemployment rate is expected to peak at 10.2 percent and gradually decline in 2011. National average home prices should stop sliding during the first part of the year and stabilize, depending on area and price range. 

In my office we have seen a marked improvement in the number of first time buyers calling for help buying a home.  I have been doing floor time (answering calls) and in the last five days I have acquired 5 new clients, one a day.

I have been answering a lot of questions from uninformed first time buyers on websites Like Homeresearch.com and Trulia.com, these sites have realtors who will answer real estate questions.  The majority of questions are regarding if one house or another is available.  They do not have a Realtor nor are they pre-approved……So I am writing this for the benefit of the many first time home buyers who do not know that their first step should be to find a Realtor they feel comfortable with.   The buyers Realtor is paid by the seller and so the expert help of an experienced Realtor comes at no cost to them. 

Their next step should be to obtain a pre-approval from their bank or other lender.  Without a pre-approval, any offer they submit will likely be ignored.  If they do not have a particular lender or bank they want to do business with their Realtor can help them with that as well.

The FHA has come up with some new rules when it comes to their loans. 

Beginning April 2010, the up front mortgage insurance will increase from 1.75% to 2.25%

There will be no more spot appraisals.  So it will be harder to get an approval on a condo. 

This is a big one.  Effective for all case numbers issued on or after February 1 of this year, all previous FHA condo approvals will be eliminated and condominium projects must be recertified by HUD.

You can pretty much forget about buying a condo until the project has been blessed by HUD or one of HUD’s approved lenders.

Going forward there will be two approval methods for FHA Case numbers ordered after February 1, 2010; 

Hud Review and Approval Process (H-RAP)

DE Lender-Approval and Review Process (DEL-RAP)

On another note>>> 
For all purchase contracts dated after February 1st, 2010, FHA has waived the flipping rule.
Private Sellers & Investors can now sell their properties to FHA buyers without having to wait 90 days.

Smart consumers, taking advantage of the historically low interest rates, the very good home prices and also, the extended and expanded tax credit, are helping to water a housing market growth.   This is in turn helping the economy in general.  According to several surveys, most of the current home owners say they would use the tax credit money to pay off existing debt, do home improvement, or invest it, or put it in savings.

Helping to energize the housing market is the reason behind the homebuyer tax credit and the recent extension and expansion.  Consumer spending is, of course, the real water for the nation’s economic growth, and a lot of consumer spending is fueled by the growing housing market,  along with new jobs, and confidence in our country’s rebound from the recession.

Living in the San Francisco Bay area is wonderful for many reasons.  The City has many wonderful Restaurants, Hotels, and the night life is awesome as well.  On this past Thursday I went to the De Young Museum and saw the King Tut exhibit.  It was an ultimate experience.  I can not believe the wonderful craftsmanship of the artifacts.  I am talking about stuff that is over 3500 years old and looks like modern tools were used.  I was not allowed to take pictures (of course) but I have added some I found on google, just to wet your appetite.  The exhibit will only be here for a couple of weeks and will not be back for at least 35 years.  If there is any way you can go see it you should make the effort.  Our wonderful state has the best weather, wonderful diversity, also some of the best museums around.  No wonder there is a housing shortage in California, that continues to raise the price of homes even in this slow economy.  Home prices have risen 2% in the last 12 months. Looks like we have hit the bottom and are on the way back up.

Been out looking at started homes? Finding out that the nicer, lower priced, homes are getting so many offers, its hard for you too get your offers accepted? 

 Well there is a FHA loan called a 203K that will allow you to get money to fix up a fixer.  You know, the homes where you go in and the carpets are filthy and the kitchen and bathrooms are a mess? 

 So,l now instead of passing them up (as others are doing) you can make an offer on one that is basically sound and only needs cosmetic work.  Get the extra money and have it remodeled.  You will have an easier time getting your offers excepted as everyone is looking to buy the homes that are already remodeled.  Also you can pick your carpet, tile and counters and will be able to move into a clean newly revamped home……

 For more information on the 203k loan program, visit www.hud.gov or www.re-buildusa.com.

Read more: http://rismedia.com/2009-12-08/changing-the-way-people-buy-homes-using-the-203k-program-to-purchase-dream-homes/#ixzz0ZK2CGO8v