Saying a Huge “Thank You” to Our Clients With a Fabulous Cruise on Lake Erie!

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Nothing brings us more pleasure than to see our clients happy and thriving in their new homes. Whether you have bought, sold or invested in property through us – we are very grateful to have had the opportunity to be your trusted real estate firm.

This time around, as we cruised around Lake Erie, hit some favorite spots along the way and enjoyed the gorgeous weather, it was a great time to be among friends. We have served some of our clients for as many as two, three or more generations – and it’s an honor to hold that distinction!

Snacks and drinks were on us – guests brought their own nibbles too and the entire trip was packed with fun...

If you would like to be a part of our next Client Appreciation Cruise – contact us today and we’ll make sure you get an invitation. And as always, we look forward to serving you with all your real estate needs!

What Can MAYBE Go Wrong With Your Loan – and How to Avoid It

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A lot of loan applications fall apart for different reasons and we know that after going through the long and arduous process of finding the perfect home that last thing buyers want is to have to be told they can’t have the home. That’s why we talked with a few of our local lenders and got the low down on what exactly causes these breakdowns in the mortgage process for many people. You won’t believe how easy it is to avoid these things!

Keep in mind that your credit score that you bring to the table will be the most important aspect to getting and holding on to a solid mortgage. As long as you come with a FICO score of 620 or great you should be in great shape. But even if your score does not meet that minimum standard, know that you can fix it and oftentimes we help our clients get on the fast track to success so they can buy the home of their dreams.

If you have started the process however, here are some of the things that commonly go wrong causing many mortgage applications to fall apart.

Incomplete Applications
Loan officers do their best to get their clients to compile as much information as possible that will be needed to complete the process. But all too often their file is incomplete because the buyer failed to provide an important piece. The types of documentation needed that are essential for the process to continue include things like:

*Two years of tax returns
*Income statements and paystubs
*Bank statements
*Divorce decrees
*401k statement
*Driver license
*Social security card

Not Enough Information
A lot of times the loan processor requires additional information in order to make an informed decision. This could be anything from names that were changed as a result of marriage or otherwise plus also additional addresses that may appear on the credit report but have not been mentioned on the loan application.

Unknown Credit Concerns
Sometimes credit reports reveal concerns that were completely unbeknownst to the creditor. This could include things like an old bill that was paid off but still remains on the credit report.

Processor Needs More Explanation
At times the loan officer takes the information and accepts it but by the time it gets to the underwriter, it’s found it’s not enough information. Yet another delay in the process, when this additional explanation does not make it to underwriter’s desk in time it can cause a rift in the application process and even end up in a rejected loan.

Properly Sourced Funds

Many homebuyers do not realize that once they are in the market to buy a home they must be very careful with the funds they have in the bank. Lenders have to follow strict guidelines in terms of the source of funds used for the purchase of a home. Lottery winnings and unaccounted for cash cannot be used and the source of all monies must be clearly demonstrated if necessary.

Liabilities Need More Data Provided

When a property that you are buying has a need for repairs often the lender approves the loan assuming repairs will be done. One part of the process involves appraisal where they may or may not accept the condition of the property and therefore approve the loan until those concerns are addressed.

Some additional causes of loan applications to fall through are as follows:

• Seller forgets something
• Signatures missing in documentation
• Incomplete information on the deed
• Closing title staff runs out of time
• Resources of time are often stretched

We can fix the problems – but your credit score is going to be the number one thing for you make sure is in good shape.

Here is our special report for more information on Loan Application Problems and Solutions – it’s a MUST READ report!

Winterizing Tips to Save You Time and Money

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Our homes always need a bit of extra protection and thought before the cold winter months take hold. Have you made plans for the things that you need to do in your own home before it gets too cold this winter?

If you are planning to take any trips or be away from your home for a few days, it is even more important to be sure that you are taking those extra precautions to save yourself a lot of heartache in the event that something happens in your home.

First, make sure that you have closed the vents under your house. That is always a great thing to do to make sure that you are keeping things warmer in the winter. Of course, make sure to open them up again when the warmer months start to approach.

A lot of people are under the impression that they should turn their thermostat way down when they leave. However, turning it too low can actually be detrimental to your tile, grout and drywall. Instead, try to keep it around the 55 degree level to make sure those things stay safe.

Another thing you should do each winter is have your furnace serviced. Nothing is worse than getting into the cold winter months only to learn that your furnace is not working properly.

If you are planning to leave your home, even for just a few days, you need to shut off the water to the home. It is very easy to do using the main shutoff valve. Freezing pipes while you are gone out of town can mean big problems and expenses when you return.

Finally, make sure to shovel your deck. We saw so many more deck repairs needed this year because people did not shovel their decks last year. It gets very cold and icy, especially on higher decks, so make sure to do this or hire someone to do it for you. If you need a referral, we know lots of people who do this kind of work.

Have a great winter, and please call on us if you have any real estate related question!

Eleven Must-Know Insider Secrets to Buying Waterfront Property

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You know in real estate they say “all agents are not created equal” and this could not be truer when it comes to dealing with waterfront properties. Case in point: we deal in many of these exclusive properties since we are located in the Northwest portion of Ohio where we have plenty of lakes, rivers and ponds. From our infinite experience, we have set aside eleven must-know things about dealing with this type of property before you consider getting started.

Work With a Knowledgeable Realtor

An astounding number of buyers sign up with Realtors that just don’t have the experience or expertise needed to gauge all that goes into the purchase of waterfront property. The best step you can do is to hire someone with prior, proven and effective experience in dealing with such homes.

Look at the Big Picture

Though you may be drawn to the structure that is housed on the property you are seeking, keep in mind that overall the property is what will hold more value at the end of the day. Keep in mind things like sight lines, the view and whether or not the location is an ideal one to build on. You can change a lot of things but you can’t change the location and its surrounding amenities.

Consider the Needs of Your Lifestyle

Keep your lifestyle in mind when seeking waterfront properties. Ask yourself what your primary use of the property will be. Do you plan on spending most of your days out on the water fishing or boating? Is the view more important or is the investment value a factor in your choice? All these questions will help point you to understanding how a property will fit your particular lifestyle.

Get a Head Start on Financing

Unlike conventional properties, some waterfront homes incur delays and other issues when it comes to financing for the simple fact that many of these properties require jumbo loans. Regardless of the type of loan you might need, it is a good idea to get a head start on knowing where you stand financially so that if the process does take longer it does not affect your sale. Also important to keep in mind – choosing the right lender is as important as choosing the right agent.

Ensure a Strong Property Structure

Properties that are located on any body of water, large or small, are more susceptible to potential storm or weather damage. It is important to evaluate whether your properties of interest can withstand the weather in that area. Exposure to the elements can ruin a seemingly perfectly good home so it is critical to evaluate this before entering into a purchase contract.

Confirm a Solid Foundation

It may not seem a potential problem but the terrain in Northwest Ohio, particularly around bodies of water (natural of manmade) is not always suitable for structures and foundations to be built on them. With deep bedrock, no granite and a high clay content of river soil, a house that has not been anchored well to begin with can cause serious problems later.

Check Every Nook and Cranny

Inspections are critical for properties located on or near the water. Not only that, it is important to work with an inspector that has proven experience in dealing with similar properties. The reason for this is that the nature of these properties is completely different than standard homes. There are varying zoning restrictions, building codes and more – all that should be clearly checked by a qualified inspector.

Know Your Capabilities and Limitations

By investigating the potential changes you may be able to make on your property ahead of time, you will be able to gauge whether or not it’s worth it to invest. Depending on the types of changes you may want to make, discover whether there are any specific regulations that might hinder your plans.

Ask Neighbors About the Property

One of the best tools you have when considering buying a waterfront property is to communicate with surrounding neighborhood property owners to survey their opinions and knowledge about the property in question. They will share with you anything they might know or have heard about the house, potentially saving you lots of headaches.

Look Into All Possibilities

If there is an area that you love with enough acreage to build a pond on it, it may be possible to have it done. During initial stages it is important to research all possibilities and requirements such as water depth, inflow, outflow, how the bottom should be done and specifics about the embankment.

Know What You’re Getting Into

Many buyers neglect to realize the level of responsibility involved in owning a waterfront property. There may be maintenance requirements if a Homeowners’ Association is not involved; keeping up the property is a big one not to mention insurance and liability. By finding out about all this prior to or at least during the inspection, you will gain a better understanding of whether or not you want to live in a waterfront home.
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Each situation, every buyer and each property is unique – that’s why it is critical to follow the first tip on this tip sheet – to hire a Realtor that knows what they are doing. We invite you to give us a call so we can get started today!

Jon Modene Team's Client Cruise

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Folks! We are happy to announce the next big client cruise of this part of our year coming soon and it’s going to be a good one! We’ve booked the fabulous Jet Express 2 (quite possibly their largest one, housing about 400 people) for a cruise around Lake Erie early in October.

On Saturday, October 6^th 2012 the Jon Modene Team will be hosting our Client Appreciation Cruise with a wonderful day spent on the Sandusky Bay, cruising around Lake Erie and on gorgeous Kelleys Island and Put-in-Bay.

The boat will pull out of the dock at 10am sharp Saturday morning.

You and your family will LOVE this relaxing time away from everyday life and what’s more – with our strange weather patterns so far this year, we’re expecting some warmer than usual water temps that will make the ride even more enjoyable.

Take the opportunity to do any number of fantastic activities available for kids and adults alike at any of our stops or just enjoy the ride itself! Here are just a few of the things you can look forward to:

        -The 19^th Oktoberfest on Put-in-Bay for just $4 a ticket you’ll get great German food, music and fun.

        -Perry’s Victory Monument is back open again with an amazing view of Lake Erie from way up above at 350 feet.

        -Biking or golf carting around Kelleys Island – or ride the train around the island.

        -Plenty of kids’ activities including the De Rivera Park on Put-in-Bay, playgrounds, aquatic center, a butterfly garden that may still be open in October and more.

        -Share a neat piece of history with your kids at the Glacial Grooves on Kelleys Island.

As you enjoy the day, you have the freedom of having your own lunch or feasting on the snacks and drinks we’ll provide on board. Either way, we’re sure you’ll have a great time! And it’s our way of saying “THANKS!” to all our past, present and referring clients. For more information, contact us at 419.874.1188 or jon@modene.com. See you there!

Ten HUGE Buyer Mistakes to Avoid

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Buying Too Much House

It is important to be able to enjoy your new home. One of the biggest blunders that inexperienced or overzealous buyers make is to jump right in and get way too much house. How much is too much?  If your mortgage is going to burn a hole in your income more than 35%, then it’s time to reconsider. Make sure you can afford to pay recurring expenses while leaving some room to breathe in the process. Just because you may have prequalified for a certain amount does not mean you can “afford” that much house.

Skipping a Home Inspection

We have all seen the horror stories broadcast across home television networks – so much so that there are teams of people trying to educate homebuyers on the importance of a home inspection. What can you stand to lose by skipping the inspection?  Anything from faulty structure to chemical exposure or pest infestation or more – can set you back thousands or tens of thousands. Better to be safe and spend a few hundred dollars than to be sorry.

Not Getting Everything in Writing

Just because a seller said you would get to keep the swings set does not necessarily mean you will get it – unless you have it in writing. Too many buyers fail to get things put into a formal contract. In fact, many brokers and agents have specific forms to avoid just that. Make sure every agreed upon item is formally written down, signed by both parties and includes any necessary details.

Not Doing Homework

You can never have too much information when buying a house. In fact, knowing as much as possible about the property, its history, surroundings, neighborhood and community are instrumental in making the right decision. Another important thing to know is current local market conditions. What are other homes in the area selling for?  What is the life of the average property in the neighborhood?  Are prices stable and is it a sellers’ market or buyer-controlled?  A quality, experienced Realtor will help you find out all this and more relevant information – key to finding the perfect home.

Buying the Most Expensive House in the Neighborhood

Even though it may seem like a good purchase – buying the most expensive home on the block is not the best move to make. No matter what you think your long term intentions are for the home, just the chance that you may want to sell in the future is enough to forego buying the priciest home in the neighborhood. Consider this: if you do end up moving, sellers will be turned off by the most expensive price tag making it harder to sell. Not only that, the home’s value is also dependent on other homes in the area – something that could backfire eventually.

Moving Too Quickly

Since buying a home is the largest financial transaction in most people’s lives, it is important for them to pace themselves. Hastily acting on the first home you see will limit you from countless options. While there should be a reasonable limit – it’s a good idea to see more homes than fewer. If you have a list of must-have items, try to achieve all or most of them in your search. You can’t do that if you jump at the first home and sign the dotted line too quickly.

Buying a Misfit House

A lot of buyers are wooed by the lifestyle and living arrangements of the homes as displayed by sellers. Once they move in, they realize things like the oversized lawn is way too much work or that the high-end finishes are too much to maintain with their young family. It is essential to keep your lifestyle in mind when searching for your next home. The last thing you need is to regret or feel buyer’s remorse when it’s too late.

Forgetting to Zoom Out

Many buyers are enticed by the number of rooms a home has, a high-end kitchen or the home’s spaciousness, without considering other aspects of living there. When they have moved in and realize their next-door neighbor runs a daycare or the nearest grocery store is twenty minutes away – they regret it. Remember to research the surroundings in the area to make sure that it’s still your dream home even after zooming out of just the house itself.

Failing to Protect Themselves

There is a reason for contingencies in an offer and without them things can get messy. When buyers neglect to outline the terms or if they choose to waive some important contingencies in the interest of securing the home, they are taking a huge risk. Common contingencies not to forego are the right to a home inspection prior to sale with the sale dependent on inspection results or availability of financing or setting a move-in date that coincides with the sale of the buyer’s previous home.

Foregoing Prequalification and Preapproval

Driving around and looking for a good home is fine but when it comes time to getting serious about the sale, unless you are prequalified and preapproved, you could easily get the short end of the stick. Buyers that don’t pay much attention to this important buying strategy actually end up losing their dream homes because the seller chose to accept the offer from someone that did this important step. Prequalification allows you to know your budget range according to the lenders’ calculations made based on your income, etc. A preapproval is a written statement from your bank saying that you have been preapproved for a loan. Sellers prefer offers that come with both, especially in today’s housing industry with savvy homeowners and buyers.

Do you want to make sure everything you’re doing is spot on?  Call or visit us today so we can review your options, help you determine what your perfect home is and introduce you to your new home!

Local Toledo Real Estate Market Seeing Improvement in Sales, Inventory and Number of Days to Sell

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One of the most frequently asked questions I get as your trusted Realtor for the Toledo and surrounding areas is “how is our real estate market doing”. That’s why we regularly report on current market statistics, especially as they relate to previous months and years. As we watch our trends, we are seeing a lot of improvement in almost all areas of our local market. In a nutshell, sales are up, inventory is down and the number of days it is taking to sell a property has fallen as well.

Though they can better be broken down into the upper-end market and the single-family homes, the easiest way to gauge just how much change we’re seeing is to look at the entire market as a whole.

Number of Homes Sold

One of the most unprecedented shifts in our market has been the number of homes sold in 2012 as of May versus the same time frame in 2010. In the two-year period, we have seen a very significant jump in sales – 40% more homes were sold in 2012. Though prices are firm and have not changed much in the past two years, the number of homes sold indicates stronger consumer confidence and of course a market that is finally shifting toward being a seller-centric environment.

Available Listings on the Market

The number of months’ supply of inventory in our market just two years ago was 9 months. In other words, it would take nine months to sell all the homes listed at the time if no new listings were placed on the MLS. Conversely, looking at this year’s numbers we are at a much lower 5 months’ worth of inventory. A balanced market is typically at 6 months so by all indications we are well into a sellers’ market at this point.

Days On Market Average

While there has not been too much improvement in the number of days it is taking to sell a home in our upper markets (homes above $300,000), the number has improved. As of May in 2010 the average DOM for upper market homes was about 150 while today that number is 97. For all others homes the DOM has remained fairly steady at about 92 days.

Pending Contracts

One very important statistic to note is the number of homes under contract this year for the upper market versus in 2010. Two years ago in May there were just 20 homes above $300k on the market whereas today there is a 120% jump in that number.
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All this is great news and it is a strong indication of better things to come. We still have a long way to go with housing prices since the average price actually went down about 8% over the past two years. Still, overall it’s a good market.

If you would like to explore listing your home or finding the perfect property to lock in the phenomenally low interest rates out there right now, contact us today!

8 Secrets to Getting Your Offer Accepted by Sellers in a Multiple Offer Situation

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With our shifting real estate market comes new (and in many cases) welcome problems to have to deal with. Take the relatively new occurrence of multiple offer situations in our area lately. After months (and years) of a buyer-controlled market, we are finally seeing fewer homes available and more buyers interested in the choice properties that are out there.

So what do you do if you are a buyer faced with multiple offer competition?  You BEAT that competition!  Here are eight ways to get around those other offers, make yours stand out and GET the home of your dreams!

Avoid a Bidding War in the First Place

One of the easiest ways to avoid a bidding war is to act fast on your interest in a home. If you see it, like it and want it – make an offer on it!  There is no reason to delay things because eventually you will have a chance to look back on the purchase while it is under contract and iron out any details. But if you don’t want other buyers fighting for the same house, beat them to it.

Keep The Emotions Out of It

Some overzealous buyers that don’t have their offers accepted lash out and retaliate against the sellers. Expressing anger and disappointment through a letter or via their agent is not a smart way to handle the situation. Often the first offer on a home is not even realized, where the seller revisits other bids received, going to their next choice. If you handle rejection gracefully, maybe with a thank you letter expressing regret but that you’re interested in the home should they change their mind, you may walk away with your dream home after all.

Bring Some Personality to Your Offer

While some agents prefer to make offers on behalf of their clients in writing and other impersonal ways, the best way to do it is by bringing an element of personality into your offer. Write a handwritten letter expressing what you love about the house and that you’ll take care of it just like they have for so many years (if applicable). This will show your sincerity in wanting the house and it will also stick in their minds when they go back to review all offers received on the property.

Choose a Communicative Agent

As mentioned in the previous point, some agents choose lackluster means of communication. When hiring your agent, be sure to select someone that is warm but also on the ball and quick.
Accessibility is key for the buyers’ agent as much as it is for the sellers’. If the seller is to gauge the level of your enthusiasm then they must be getting those signals from your agent.

Know Your Numbers

Sometimes the final sales price doesn’t matter. There will be an appraisal before the home is financed, which is the value that you will end up paying on the home. Knowing in advance gives you a head start over other buyers since you will be armed with knowledge ahead of time and can anticipate a reasonable offer accordingly. You should be aware of price per square foot as well as other comparable sales in the area. Keep in mind, there may not even be a need for a bidding war because the price might be capped by the appraisal anyway.

Don’t Stray From the Straight and Narrow

Offers that are simple, cleanly written and to the point are the ones sellers respond to the most. Especially in a multi-offer situation, sellers do not want to have to rifle through endless pages of contingencies, conditions, minor detail mongering and other unnecessary things. The easier you make it for the seller, the better your chance to get the home of your dreams. Remember that at the end of the day you can go back and identify any specific wants you may have but just wait until you have an accepted offer.

Choose Your Priorities Carefully

A common request these days is for FHA buyers to request assistance from the seller with closing costs. If you are a buyer that is faced with a multi-offer situation and you have the choice to not ask for closing costs – you may just be able to win your bid after all. Most sellers today are selling their homes after 10, 20 years and they have no idea of the recent trend of closing cost sharing. To avoid this and the potential of losing your bid on the home overall, don’t ask the seller – make alternate arrangements for closing costs. Borrow from someone. Accept a gift from a family member. Tap into your savings.

Do Better Than the Rest

An excellent tool used by buyers in these situations is to offer more than everyone else. Everyone wants more money and in today’s market sellers are already getting less than what they had expected to get. If you have found the home of your dreams pay extra money to make sure your offer is the one that is accepted and it will offset any costs you may have needed to put into a less-than-perfect property otherwise.
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Remember, this is a time when more buyers are vying for fewer available homes. So nothing is foolproof and there is always the potential of not winning your bid. The best defense you can have against that happening is to be prepared in advance. Get ready to be disappointed. If the home you are looking at is perfect, chances are there are others looking at it with the same eyes too. Aside from putting into our secrets into play, the best thing you can do is to stay realistic. When the right house comes along – things will fall into place. Good luck!

Home Selling System for Higher End Properties

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Selling a home is selling a home, no matter if its selling price is $100,000 or $1,000,000. But the secret to selling a home successfully is always in the honestly with which the transaction is conducted. Still, with higher end properties there is more money at stake so owners are equally as more wary prior to listing their home.

One of the ways we combat some of the perceived challenges of selling an upscale home is to be fully prepared by way of an appraisal. Most people do not realize that there are different levels of appraisals that can be performed on a property. They range from a simple one done just to fulfill a paperwork formality to a very complex and detailed one to help investors determine the viability of the purchase. Appraisals that are performed primarily for a bank that is simply processing a refinance will not have as much pull as the ones that are done for lenders looking to determine whether or not to loan money.

When it comes to a high-end home the transaction can get complex. For this reason we strongly advice homeowners to get a professional appraisal done prior to listing the home for sale. Not only does that provide them with the necessary market data but also it gives them an updated snapshot of what the buyers might find when they have an appraisal done.

How An Appraiser Determines the Fair Market Value

Armed with the proper information from an appraisal done through a licensed professional, sellers can then assess their price and also compare the same with other like kind properties in the area. Though there are multiple ways that a professional will determine the fair market value of your home, the most widely used form is reviewing comparable sales. The ideal information is of homes that sold in the neighborhood during the last 6 months – and it is important that the homes listed on the comps report only include homes almost entirely similar to the one being appraised.

Key areas that are considered during an appraisal are the physical condition of the home, area comparable sales from the last six months, the home’s structure, function and performance plus the overall expected life of the home. Of course the higher the appraisal, the greater the potential there is for a higher appraisal value, allowing the seller to realistically price the home for more.

Appraisers and Home Inspectors Play Different Roles

A common misconception is that a home inspector is the same as an appraiser. While the licensed appraiser does evaluate functionality of the home, inspectors are not necessarily always licensed and they are qualified to inspect the home for function, safety and structure.

How To Assist In the Appraisal Process

Though the homeowner will not be able to influence the appraisal process in any way, there are things that they can do to assist in the process. Be sure to keep all functioning aspects of the home that the appraiser would want to view unobstructed and easily accessible. Also, if there are copies of the home’s blueprint or past appraisals, providing them up front will be very helpful to the inspector. Lastly, remember to be respectful and courteous to the professional when they are reviewing your home.
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If you would like to explore selling your home or looking for a new one to purchase – contact us today. We would love to assist you in all your real estate needs!

The Secrets to Buying a HUD Home

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For several years now, the market around Toledo has been leaning towards REO properties.  REO stands for real estate owned and simply means properties that are owned by a bank.  Sometimes, buyers are concerned about these types of transactions because they seem to be more fraught with danger.  This can be true, especially if you don't know or understand the process.  Here are three things you need to know about buying a HUD home.

First, you need to understand about HUD home condition.  These HUD owned properties are not always money pits.  In fact, many HUD houses are in near perfect condition.  Most of them are in at least great condition to near perfect condition.  Some may need rehab, but it's very rare to find a completely destroyed HUD home.  Often, HUD homes may need some cosmetic work done to them such as new carpet or appliances.

The second thing you need to know is that lenders will work with you on HUD homes.  In fact, there is a great one called the 203K.  For example, a home may need a roof or have a missing kitchen, so the lender will give you a 203K loan which allows you up to six months to work with them to get everything fixed.  All of the money that you need will be rolled into the loan and allotted as needed.

These loans have the same low interest rate and easy financing.  You can think of it as an FHA loan on steroids.

The third point to remember is that these HUD homes are houses with instant equity.  You're getting a huge discount on these homes, and sometimes it is thousands of dollars.  The homes are preapproved and pre-appraised.  You can't get much safer than that.

At the time that I taped this video, there were over 30 houses around the Toledo area that were being sold as HUD homes.  These houses ranged in price from $19,000-$155,000.  As you can see, that gives you plenty to choose from in a very reasonable price range.

If you'd like to look at HUD homes or other kinds of properties, or if you just have general real estate questions, drop me an e-mail or give me a call.  I'm always happy to help!

Demystifying The Fannie Mae Homebuying Process

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When it comes to purchasing a Fannie Mae property, buyers are often confused by the process.  Let me reassure you that you shouldn't have to be stressed out about going through the Fannie Mae process.  When working with an experienced agent, you won't have any trouble navigating the confusing waters of buying a Fannie Mae property.  However, there are some things that you need to think about before you purchase a Fannie Mae home.

Decide

First, you have to decide whether or not you should buy a home right now.  It might seem strange for a real estate agent to say that, but some people are simply not suited to purchase a home right now.  Only you can make that decision, with the advice and counsel of a great mortgage lender.  Make sure that you are in a financial position to purchase a home before you even get the process started.

Choose a Lender

Second, and you want to choose the type of loan and lender that you will use to purchase a Fannie Mae property.  Not every lender is equipped to help you buy a Fannie Mae home.  You should start shopping for a lender, doing your research and getting recommendations on who to use before you ever begin the hunt for a home.

Get Preapproved

Third, get preapproved by your lender in writing.  This is a step that many home buyers miss, and it can cost them the house of their dreams.  You need a written, formal preapproval letter from a lender who has checked your credit and income.  Most home sellers, Fannie Mae or otherwise, will not even consider an offer from you unless they see this formal letter of preapproval.  You don't want to miss out on a home simply because you didn't do the legwork beforehand.

Time to Shop!

Fourth, start shopping for a home.  This is the step where you go out and find a great house.  Of course, we are certainly able to help you find Fannie Mae homes that will suit your needs and meet your criteria.

The next step in the process would be negotiation, but that's a topic for another day.  As you negotiate on your Fannie Mae properties, make sure that you consider Fannie Mae's goals for the property.  Be certain that you understand whether they are selling to first-time home buyers only, owner occupants or even investors.  You also need to consider whether the property needs repairs and could possibly qualify for 203K financing.

If any of this information sounds foreign to you, we are always here to help you.  Just give us a call or drop us an email, and we will answer all of your questions about buying a Fannie Mae home.

The Pros and Cons of Buying a House With a HomePath Loan

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One of the real estate industry’s best-kept secrets is the ability to buy a home that is in good shape, at a great price and without having a lot of the extra fees that buyers have to endure with other loans.  The Fannie Mae HomePath program is an in-house program that is set up primarily to list, sell and finance homes that are bank-owned by the organization.

There are several advantages to a HomePath home that work well for first-time buyers or those looking to buy up considering the current market conditions.  Though there are a few restrictions, this product offered by Fannie Mae is by far the most advantageous for several reasons.

Lower Closing Costs

Closing costs entail anywhere from 2.5% to 4% of the total purchase amount and include things like loan origination fees, discount points, appraisal costs, surveys needed for the property, underwriting fees, title search and insurance fees and other purchase-related fees.  Fannie Mae provides loans with lower closing costs allowing the buyer to pocket more cash at the end of the deal.

No Appraisal Needed

One of the best aspects of a HomePath loan is that there is no appraisal requirement.  This benefit works in two ways.  First, the buyer is spared the cost of getting an appraisal done on the property, something that would normally cost anywhere from $350 and up depending on the home.  Second, fewer delays occur with one less step in the process.

No PMI Requirement

One of the hardest hit realities of owning a home when you do not have at least 20% to put down on the purchase is the need for Private or Primary Mortgage Insurance. This is set up to protect the lender in case of default on the loan.  Fannie Mae does not require any PMI for HomePath properties, which leaves HomePath homeowners with a lot of extra cash in hand every month for the entire life of the loan. FHA loans have an upfront mortgage insurance fee in addition to a monthly mortgage insurance fee. With Fannie Mae’s HomePath program you end up avoiding both.

No Obstacles for Condos and Townhomes

Unlike this program, conventional loans have a host of requirements for buyers wishing to purchase a condo or townhome.  Things like owner occupancy percentage and dealing with the corresponding Homeowners Association’s requirements are not a factor in determining mortgage eligibility for HomePath loans.  In fact, condos and townhouses are one of the more difficult types of property to purchase without meeting all requirements.

Low Down Payment, Flexible Terms and Allowed Seller Concessions 

The homeowner is not left without any choices.  In fact with a loan from Fannie Mae you can still make a down payment as low as just 3% and the funds can come partially or entirely from gifts given by family or friends as long as they do not have a financial interest in the purchase.  In addition, HomePath loans are flexible – you can get a fixed rate, adjustable rate or interest only mortgage.

In a buyer-controlled market one of the advantages of increased seller competition is the inclusion of seller concessions in the sale.  Fannie Mae does not prohibit seller contributions toward closing costs – adding one more way for buyers to save in their purchase.
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As with most programs, there are a few guidelines you need to adhere to.  The HomePath loan program requires that the home be purchased and used as the primary residence and to be sure Fannie Mae for can conduct an audit up to a year from the date of sale.  Finally, only qualified Realtors must sell HomePath homes and not all brokers are licensed to sell Fannie Mae homes so it is important to find a Realtor that does handle these properties.  The loan is only applicable on Fannie Mae bank-owned properties but with interest rates at their all-time historic low, now is an excellent time to buy!

Anything Can Go Wrong With Your Loan – Here’s How To Avoid It

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There are some common misconceptions floating around about there not being enough money in the bank when it comes to mortgages.  This could not be further from the truth.  Lenders have plenty of money.  Sure, they are being more careful about who they lend it to and yes they are definitely making sure all i’s are dotted and t’s crossed.  But here’s the thing:  do you want to have to jump through hoops of fire or would you rather sail through the mortgage loan process smoothly?

With our special report that shares with you the real estate industry’s insider information on the top reasons loans go awry, you can avoid having to go back to the drawing board over and over again and ultimately risk losing your loan (and your dream house) in the end.

Accuracy of Information is Key

As you sign your loan application you will notice that there is a mountain of paperwork.  One of the most damaging things to a loan app however is when there are discrepancies within the paperwork.  As long as you can vouch for your information, provide accurate and updated data and support it with plenty of documentation – your loan application should not suffer any major delays or cancellation.  This applies to basic information such as names and aliases to employment history to past judgments or other negative financial factors that you need to report.

Incomplete forms and less-than-adequate supporting documentation such as W2s or payroll stubs are just one of reasons a loan officer will move on to the next borrower’s paperwork.  It is important not to be offended if you have to provide a lot of details.  When it comes to things like the source of your extra income, where and from whom you received cash gifts or other sensitive information like that, a lot of homebuyers get squeamish.  In fact, borrowers should be prepared to do a lot of “explaining” through what loan officers call Letters of Explanation for things that are not crystal clear or cut and dry.  And there are a lot of things that simply do not add up without an explanation at hand.

Processing Makes Perfect

Anyone that has gone through the process of applying for a mortgage knows that it takes time.  Even if every single aspect of the app were perfect it would still take time.  Some delays can be avoided, all of which can be done by making sure there are no outstanding liens on the home, providing and being able to confirm the source for all funds used in the transaction and ensuring all necessary repairs are done in advance.

One of the most frustrating aspects of going through a mortgage loan process is when a step adds days and days to the timeline.  With each item that needs further clarification, additional investigation or more, more time is added and more frustration ensues.  The single best way to avoid this problem is to provide as much information as possible from the start.

(Almost) Everything Can Be Fixed

By working with the right Realty and mortgage team you can turn around most of the issues that come up as roadblocks in the process.  It takes time but it can be done.  To find out more about what may go wrong with your loan, email us and we’ll send you a copy of our free report with the top reasons loans go bad and how you can avoid each.

What’s a Real Estate “Short Sale” and Why Should I Buy One?

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The best way to explain a short sale is with an example:

Assume a homeowner has an unpaid loan mortgage balance of $200,000, but the property will sell for only $175,000. The lender holding the mortgage agrees to sell the house for the $175,000 amount, which, of course, leaves it “short” of the full amount of $200,000. Thus, the name “short sale!”

Obviously, lenders don’t like short sales since they’re not in business to lose money. But such situations do occur for various reasons often related to “hardship” situations. Examples include:

• Permanent injuries
• Financial insolvency
• Job layoffs, etc.

This is a sad situation for the homeowner, but it does offer an opportunity for you to pick up a bargain. However, there are several potential downsides you should be aware of before you make an offer.

Pitfall 1: Allow time for the lender’s decision.
Once your offer is accepted by the seller, the contract will be sent to the seller’s lender for approval. This process can take anywhere from 2 to 12 months, and there’s oftentimes no way to know beforehand exactly how long the lender will take.

Pitfall 2: The lender is under no obligation to accept the short sale.
Often times, lenders will come back with a counter of a higher price, or will sometimes reject the offer outright. There is no way to know beforehand exactly what the lender is thinking. This risk can be reduced by pre-qualifying the seller and making sure he or she has a genuine hardship, and by making sure you offer close to market value.

Pitfall 3: The seller must be committed to the process.
A great deal of paperwork and commitment will be required of the seller. There have been cases where the seller does not complete everything that is necessary and causes the lender to reject the deal. Additionally, there have been cases where the seller backs out to declare bankruptcy. Make sure the seller is committed to the process before you begin!

Summary

You can pick up great bargains in the short sale market, but you have to be very knowledgeable and very patient! And, as mentioned earlier, there are risks and often times you will face disappointment. Hiring a professional realtor who has experience with the ins and outs of short sales can help reduce these risks.