Utah Real Estate Survival Guide

Helping You Navigate Our Local Real Estate Market

A number of government sponsored programs to help…

A number of government sponsored programs to help homeowners through the housing crisis expire 12-31-2012. If you are considering a short sale, time is of the essence. Especially since the typical short sale takes +/- 9 months to complete. HAFA and the Mortgage Debt Relief Act of 2007 both expire at the end of 2012.

Second Mortgage Won’t Accept The First’s Approval

I am currently representing a Buyer client on the purchase of a Short Sale. The Seller’s first mortgage is a Fannie Mae backed loan with Wells Fargo. The second is with US Bank. This is a traditional short sale, not HAFA.

Wells Fargo has issued their approval, with no Seller contribution at closing or promissory note. They have allocated 10% to the second mortgage, per their investor guidelines, and will permit no more – to the exclusion of additional funds/promissory notes from the Seller or the Buyer that those parties would be willing to bring to the closing table. US Bank has rejected these investor terms.

Now, you’re thinking, “so what’s so unusual about any of this?” What’s my point?

My point, a question really, relates to the listing agent’s ethical responsibility given this situation (per the Realtor Code of Ethics). Since the second mortgage has rejected participation in the short sale, shouldn’t the listing be removed from the MLS? Or is it acceptable to let it languish, as part of an already bloated inventory, until it dies a natural death as an expired listing?

I’m looking forward to reading your comments. Please post!

Kim Novak, RE/MAX Masters
kimnovak@remax.net
(801) 726-1443

Soapbox ❐ All That Bailout Money

Soapbox: “A thing that provides an opportunity for someone to air their views publicly.”

I read an article earlier today that made me gasp (which in the new vernacular means that it was compelling enough for me to hit the “share” button and comment). The US Government has filed a lawsuit against Deutsche Bank. That’s the good news. The bad news is that it involves $1.274 BILLION that HUD – that’s us – has paid, or in the process of paying, this ONE bank, for bad loan insurance claims.

The heartbreaker is that this is really about bailing out a bank, not for mortgages that it originated (which would legitimize the HUD compensation), but for a bad investment decision Deutsche Bank made in 2007 when it bought a subprime/Alt-A lender, MortgageIT.

How did a lender who “specializes” in subprime/Alt-A mortgages EVER get approved to originate HUD insured loans? From my brief internet foray into researching MortgageIT, it doesn’t look like they did. They simply bought HUD backed loans from “small to mid-sized banks, credit unions and mortgage bankers” to enhance the marketability of their own portfolio. The one that Deutsche Bank bought off on.

That being said, I know that Deutsche Bank is not stupid. I know that Deutsche Bank did their due diligence. I know that Deutsche Bank got burned. Wait, did they?

Deutsche Bank Posts Best 1st Quarter Since 2007

Executive Summary? Deutsche Bank Net Profits Up 17%

Shame on us …
———————————————————
Knowledgeable & Professional Representation … Aggressive Negotiation

Contact Info:
kimnovak@remax.net
Phone or Text: (801) 726-1443
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Kim Novak is a Realtor® and Broker Associate with RE/MAX Masters in Salt Lake City and Layton, Utah. Licensed in 1995, Kim has closed over 500 sales during her full time real estate career and achieved industry recognition as a Lifetime SalesMaster and member of the RE/MAX Hall of Fame. She holds a BSBA with an emphasis in Sales & Marketing and has achieved the following designations/certifications:

ABR: Accredited Buyer Representative, AHWD: At Home with Diversity, CDPE: Certified Distressed Property Expert, CHS: Certified HAFA Specialist, CRS: Certified Residential Specialist, CSP: Certified New Home Sales Professional, ePRO: Internet Professional, GRI: Graduate of the Realtor® Institute, SFR: Short Sale & Foreclosure Resource, SRES: Seniors Real Estate Specialist

When You Interview a Realtor® in 2011

During 2010, there were 25,119 sales closed and posted in WFRMLS (Wasatch Front Regional Multiple Listing Service – Utah). There are currently 8,194 active agents. That’s only 3 sales, per year, per agent.

When you’re interviewing a Realtor® to represent your home buying or home selling interests, an important question to is, “how many clients did you, Ms/Mr Realtor, help achieve their homeownership goals this past year?”

This is an especially important question because there is and has been no room for error in pricing and negotiation, advertising and marketing, during this continuing housing crisis.

In order for you to be successful achieving your home buying or home sale goals, you’ll need a Realtor® who is experienced in working through the challenges of THIS real estate market.


Thankful for 48 Closed Sales in 2011!

Kim Novak, RE/MAX Masters Broker Associate (About Me)
BSBA, ABR, CDPE, CRS, CSP, ePRO, GRI, SRES, 203k Specialist (My Resume)
RE/MAX Masters is an ERC: Employee Relocation Council Member

(801) 726-1443 Mobile
(800) 977-7835 Toll Free Phone
(866) 541-2392 Toll Free Fax

Join My Utah Real Estate Tribe on Facebook!

email kimnovak@remax.net
website www.UtahHouseandHome.com
blog www.UtahRealEstatebyKimNovak.com

Today’s Real Estate Market Agenda Click Here
Search the Wasatch Front Regional MLS for Homes Here

Paying for the Homebuyer Tax Credits – The Cost Runs Deep

In November of 2009, I wrote a blog post entitled Was the Tax Credit Extension a Good Idea?

Here is an excerpt:

In my opinion, tax credits have become subsidies distorting the real estate market. I believe that any further extension or expansion of this program, with the exception of those benefits due our military, will be counterproductive. I say it’s time to help homeowners. Figure out how to give them $8,000 so that they don’t have to sell as a short sale. There are a lot of well loved homes in excellent condition that would make ideal homes for new buyers, creating move up buyers for other homes, that can’t be sold now because the sellers are upside down in their mortgages. A short sale may benefit a new buyer, but it eliminates another (for two years at least). Why not consider helping sellers with a monetized tax credit so that they can sell their home at market value, stop or minimize short sales and foreclosures eroding property values, get buyers into “non-distressed” homes and turn that seller into another buyer, thus propelling the market forward.

Here is what I am experiencing today:

I have received numerous requests through the holidays for market evaluations from homeowners who either bought, or refinanced, during the past 3 years. What I’m finding is that the value of these homes is almost as upside down as those of homeowners who bought in 2006-2007. Artificially inflated home sales prices, driven by subsidized demand, and used by appraisers to substantiate further inflated home sales prices, is setting the stage for Round 2 of the Great Housing Crisis. Not only will the various homebuyer tax credits burden the Federal budget deficit for years, we have now created a situation where the same homeowners who benefited from $7,500 – $8,000 in “cash back after closing”, are going to be in the distressed property boat along with everyone in the coming tide of foreclosures. Good luck getting THAT money back.

The solution is simple stated. It’s about jobs. Always has been and always will be. How to create those jobs should be the domestic policy focus of 2011. Ideas?

2011 Salt Lake Housing Forecast Breakfast

Please let me know, by January 5th, if you would like to join me! I have four extra tickets available for non-Realtor® guests. If you’re thinking about buying or selling a home, this event would provide much more relevant, decision making information than the news you get from any of the national media outlets. All real estate is local, and this is OUR local housing report.

(Salt Lake Realtors) BOARD OF DIRECTORS MESSAGE

… 2011 Salt Lake Housing Forecast Breakfast on Tuesday, Jan. 11 at 8 a.m. at the Little America Hotel in downtown Salt Lake City.

This year Lawrence Yun, chief economist for the National Association of REALTORS, will speak on recent developments in the housing market and the direction home prices are headed in the next 12 to 24 months.

In addition, a housing forecast by James Wood, director of the University of Utah’s Bureau of Economic and Business Research, will be distributed. This report will offer a glimpse of what is in store for Salt Lake County in 2011.

Seating is limited. The deadline to register is Wednesday, Jan. 5. Members are free. $25 for guests.

Is It Finally Time to Buy ( or Sell ) a Home in Northern Utah?

Although it will be quiet through the week leading in to the new year, January 3rd, the first business Monday in 2011, will bring renewed activity to our real estate market. All indicators point to a January 2011 that will bring with it stabilization of home values and the quantitative beginnings of recovery in our local housing market.

With both home prices and interest rates at historic lows, it is a perfect time to buy.

With prices and rates bringing more buyers in to the market, it is a perfect time to sell.

Good News Report – Utah’s Unemployment Rate Remains Significantly Below National Average
Utah’s Employment Summary: November 2010

CNBC’s How’s Housing? Report

The news contained in this report is simply that 2011 will continue to be a strong buyer’s market. Sellers who have been holding off listing their homes for sale, anticipating real estate values to recover, are going to have to wait at least 12 – 18 more months to see any improvement. It is NOT going to happen this spring.

This is not necessarily bad news. If a seller is also looking to buy a home, then they should be able to take advantage of home prices comparable to those in 1997. Interest rates are still at or below 5%. Two historic conditions that may not present themselves again.

This is the time for savvy home owners, current or new, to take advantage of unprecedented opportunity in the housing market.

Click here to watch the How’s Housing? Video
Posted to: Mortgage and Real Estate Video News
Wednesday, December 22, 2010 10:08 AM
Discussing the state of the housing market and the impact rising interest rates are having on the housing inventory, with CNBC’s Diana Olick.

KeyBank’s Key Community Mortgage

Update on KeyBank’s 100% Financing Program:

In my last post about this topic, I referred to this as a “new” program. After meeting with Kristin Shields and Will Mullin, KeyBank Mortgage Advisor and Relationship Manager respectively, I know now that Key has had this program in place for +/- four years.

Disclaimer: The information that I am sharing here is NOT to promote KeyBank. As a professional REALTOR®, representing both buyers and sellers, it is my responsiblity to have a broad knowledge of available financing to achieve my client’s home ownership (or home sale) goals. Lender guidelines vary, the most significant of which is FICO score minimums. I have experienced some lender FICO requirements as high as 720. KeyBank’s 620 benchmark is extremely borrower friendly.

The 100% program is actually called the “Key Community Mortgage“. I entered the meeting a skeptic. I left a believer. And I can’t wait to share this incredible financing opportunity with my clients. No other lender that I am aware of is offering a truly obtainable community mortgage such as this. I was even able to get a glowing recommendation about the program from a title officer who I know and trust, who has successfully closed a Key Community Mortgage.

Meeting Summary

Question: Why is KeyBank offering this program? It seems too good to be true, or too good to last.
Answer: This is Key’s way of meeting federal requirements for community investment.

Question: What does this mean, realistically, in terms of purchase price and interest rate, for the borrower?
Answer: A $500 minimum investment, approximately .25% add on to the interest rate (example: yesterday’s rate was 5.25% = .25% over yesterday’s VA rate), and, based on income guidelines, works ideally on a purchase price up to $180,000.

Question: Are the funds available for this program limited, capped or budgeted?
Answer: NO

Cool Program Details

  • Minimum FICO score is 620. This is also true for their FHA and VA loans.
  • Income limits are based on Borrower’s Income only, not Household Income, which is problematic sometimes with Utah Housing Loans (another 100% option)
  • Income limits do not apply in Target Areas (refer to the program guide, pages 6-9, to determine tract income level of subject property and financing guidelines)
  • No First Time Homebuyer Requirement
  • No Mortgage Insurance, so the .25% rate add is a non-issue
  • Can be used to refinance at 90% CLTV
  • And, the coolest of the cool, is that each Key Community Mortgage is manually underwritten. Aha! A lender that realizes that a person, and their life, cannot simply be reduced to a three digit number and an underwriter guideline.
  • For More Information Contact:
    Kristin Shields, Mortgage Advisor
    Phone: 801-792-2625
    Fax: 216-370-9481
    Email: Kristin_Shields@KeyBank.com

    Tell Her You Read About the Program Here!

    Utilities are Not Required to be on for a VA Appraisal

    VA Appraisals and Utilities Update:

    According to VA Denver, the utilities, furnace, water heater, etc do not need to be on for a VA appraiser to complete the appraisal. Most lenders/underwriters, such as those at Wells Fargo and KeyBank, agree that they only require the property to meet VA guidelines, and do not have additional lending/underwriting layering. The appraiser is only required to note deficiencies if there is an obvious problem ie a red tagged furnace.

    This is great news if you happen to be working with a VA buyer on the purchase of a foreclosed or short sale home, especially during the winter. Most banks and home owners of vacant properties can and will arrange for the utilities to be on for the purpose of a home inspection, for a brief period of time. Coordinating schedules between utility providers, de-winterization, and home inspectors is generally doable, but throwing an appraiser’s schedule in to the mix is generally not.

    FHA appraisal guidelines are not as lenient. All utilities must be on and the furnace, water heater, etc must be demonstrably operational.

    VA Appraiser’s Handbook

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