Earthquake Preparedness: Are You Ready?

As the 5.9 magnitude earthquake in Virginia on Tuesday demonstrated, natural disasters are not the sole purview of West Coast homeowners and traveling expats. With reports of tremors felt as far north as New York and as far south as Chapel Hill, N.C., the quake reminds us that there’s no excuse to be caught flat-footed by nature’s whims. Below is a collection of stories on earthquake preparedness by AOL Real Estate contributors, ranging from how to quake-proof a home to tailoring the best homeowners insurance policy for your area.

Article is from AOL Real Estate.


HOAs Sue Banks Over Foreclosures

In a further indication of how far-reaching and deleterious the foreclosure crisis has become, homeowner groups have taken to suing banks in order to reclaim properties from delinquent homeowners, Bloomberg reports.

Across the country — and especially in states with high foreclosure rates, like Florida, California and Nevada — homeowner and condo associations are being forced to contend with homeowners living in properties they can’t pay for, and banks that won’t take action unless prompted by litigation.

Some 60 million Americans, or about one in every five, live in properties with homeowner or condo associations, according to Bloomberg.

The report underscores how deeply the foreclosure crisis has distorted American housing. In July, the number of homes entering foreclosure fell to a 44-month low, a statistic that says less about the solvency of homeowners than about the massive backlog of foreclosed properties that have yet to be processed and repossessed. In some states, it could take years or even decades to clear the docket of all the houses currently in foreclosure.

Article is from AOL Real Estate.


100 Productivity Apps for Real Estate Professionals

Going mobile has never been so easy.

This report includes a series of top 10 lists featuring a range of popular apps that real estate professionals may find useful in boosting their productivity or efficiency as they build up their business.

The apps featured in this report are based on searches of keywords and phrases at apps-ranking site TopAppCharts.com. The app lists include free and paid apps for iPhone and iPad devices.

 

Check out all the cool apps and their descriptions at inmanNews.


Five Tips For Seller Financing

If you want something done right, do it yourself. Even when it comes to lending a buyer the money to purchase your house.

According to the National Association of Realtors, seller financing is on the rise. For frustrated sellers with plenty of equity in their homes, it could be one way to help move a stalled property off the market.

There are plenty of people who have cash on hand, good jobs and pay their bills on time but don’t have good enough credit to get a loan, says Vince Scott, CEO of Intero Real Estate Services in Nevada. A self-described “fixer and flipper,” Scott has successfully offered short-term seller financing on several occasions. It’s “neighbor helping neighbor,” he said, “good old-fashioned American spirit.” Patriotism aside, there is financial risk involved for individual home owners who offer to play banker. Just how safe is it for a home seller to carry the financing for someone who likely couldn’t get a loan from a bank, especially if that buyer has a tarnished credit rating because they walked away from another property?

Here are some tips if seller financing is something you’re considering.

1) Get a substantial down payment.
Banks are regularly requiring 20 percent down, so you can require the same — or even more.
The money your buyer gives you upfront is yours to keep should he default on the loan. It should be enough to justify the risk you are taking and compensate for the hassle and expense you will have if you need to foreclose and evict him. Think about what could go wrong: Your buyer could lose his job, face large medical bills or simply walk away if the value of the home drops below what he owes you. Get as much up front as possible.

2) Vet the buyer.
You can and should ask for permission to run a credit check, to see pay stubs and even tax returns. If the buyer says no, you can say no to the idea of playing banker. Why did the bank turn him down? There are absolutely circumstances where qualified people are getting their loan applications denied. Examine those reasons carefully.

3) Set the terms you want.
You can determine that you only want to hold paper until the buyer is able to qualify for a conventional loan — three years after a short sale or seven years after a foreclosure. At that point, the buyer of your home needs to find a conventional lender or sell the house to meet the balloon payment. It rarely makes sense for a seller to offer a 30-year loan. You also can set the interest rate you want to charge; most owner-financings tend to be one percent to three percent above the rate for a 30-year mortgage.

You can also establish penalties for late payments and lay out the actions you will take should payments not be delivered on time. Bottom line: A missed or late payment means you can start legal proceedings to take the house back.

You can also command a higher price for your house because you are offering to hold the mortgage, although in this market, just increasing the odds of getting a buyer in the door may be accomplishment enough.

4) Make it worth your while financially.
Scott says that owners can make 8 percent to 10 percent on their money, which pretty much beats any other investment opportunity out there. There are also tax advantages to receiving the proceeds of your home sale spread over time, so talk to your tax adviser. Some owners simply prefer the idea of getting a monthly “income” check from the proceeds of their former house.

From a buyer’s perspective, there are no closing costs involved, no points to pay. This saves thousands of dollars.

5) Stimulate interest in your home for sale.
Advertising that you, the seller, are willing to hold the mortgage can greatly increase the pool of people interested in buying your home. In an economic environment where lending standards have never been tighter, it is a huge advantage for your property to be the one where buyers can get financing.

Seller financing also attracts people looking for a “lease to own” situation, where a portion of each month’s rent goes toward a down payment on buying the home.

Article is from AOL Real Estate.


Burt Reynolds Slapped with Foreclosure Suit in Florida

Add “Smokey and the Bandit” star Burt Reynolds to the ever-growing list of Americans chugging down the foreclosure highway. Reynolds owes about $1.2 million on his Hobe Sound, Fla., home and hasn’t made a mortgage payment in almost a year, reports the South Florida Sun-Sentinel. The 12,538-square-foot house is listed for sale at $8.995 million, which, given the depth of the housing market plunge in Florida, is probably what it would cost to buy the entire state.

Florida, the Sunshine State that gave the nation hanging chads and the anti-gay stylings of OJ-swigging Anita Bryant, has been devastated by the housing collapse and is a national leader in foreclosures. According to the Sun-Sentinel, the suit against Reynolds was filed on behalf of the Merrill Lynch Credit Corp. and also names BankAtlantic as a junior lien holder for a second mortgage on the home in the amount of $750,000.

The house in question has five bedrooms, a state-of-the-art theater, billiards room and an antique paneled office. The property includes a pool, waterfalls, exercise and wine rooms plus a dock and helipad. It occupies more than three acres.

The 75-year-old actor, who starred in “Deliverance,” was formerly married to actress Loni Anderson. He filed for a Chapter 11 bankruptcy in the 1990s after their divorce. He also has a home in Little Rock, Ark.

Article is from AOL Real Estate.


Seller Financing: An Idea Whose Time Has Come

Do you want to sell your house but have figured out that buyers are as scarce as snowflakes in the Arizona desert? If you’ve owned your home for a long while and have equity in it, your best bet might be to offer seller financing.

Seller financing essentially means that you will act as the bank when the bank won’t. It’s an idea whose time has come because of tighter lending qualifications. According to the National Association of Realtors, there’s already been an uptick in the number of homeowners who carry loans for their buyers.

But a couple of measures kicking around in Washington may unintentionally throw a wet blanket over seller financing — effectively ending a practice that could actually revive the comatose housing market.
First is the SAFE Act (Secure and Fair Enforcement for Mortgage Licensing). Intended to regulate mortgage loan originators, the SAFE Act is silent about whether Mom and Pop sellers are subject to the new rules. HUD guidelines suggest that as long as you are not being compensated as a loan originator — paid points and fees and the like — and the house you are selling is your own, you probably aren’t covered by the SAFE Act’s provisions. Probably.

And then there’s the Dodd-Frank Act, which is working its way through the regulatory process right now. Buried deep in its 179 pages are restrictions that could also cause problems for sellers who want to offer a financing package to whomever buys their house. Dodd-Frank regulations exclude individuals who sell up to three homes in a 12-month period, but leaves a lot of unanswered questions. For example, the new regulations don’t exempt the home’s builder, so what about folks who had custom homes built for themselves? What if you want to finance the sale of your second home, or an income-earning property you own? All unaddressed — and therefore unanswered — questions.

The result of these measures, if only because of the chilling fear they instill, could be crippling. Ken Trepeta of NAR says both measures create a “significant gray area,” and that’s not a good thing.

Consumers “Kicked to the Curb”

Will people continue to provide financing once these regulations kick in? For now, Vince Scott, CEO of Intero Real Estate Services, thinks owner financing is a great idea.

He says that he’s had to go into “creative financing mode” several times for his business as a “fix-and-flipper.” Six months ago, he and his partners paid $350,000 for a 2,800 square foot foreclosure in Reno, Nev. They put about $70,000 into repairs and renovations and relisted the property at $549,000. When offers were not forthcoming, they moved to Plan B: providing the financing to the buyer. The house sold quickly.

Scott requires at least 30 percent down on short-term loans of interest-only payments at between 7 percent and 9 percent. “If we can get enough down and the buyer is otherwise credit-worthy but just needs time to get past a short sale — three years — this is a good business decision.”

In all the cases where Scott has provided seller-financing, the buyer was either turned down by a lender or knew they would be so they didn’t bother applying. So far, Scott has not had to repossess a house.

He notes that the foreclosure process in Nevada is faster and simpler than in other states, so if it became necessary to invoke it, he’d get the house back fairly quickly. That said, people being foreclosed on sometimes trash the property and it can take months to physically evict someone, so lending a buyer money is not without risk.

Still, Scott says, it’s the right thing to do both from a business standpoint and a moral one.

“Consumers have been kicked to the curb,” he says.

And owner financing is an alternative whose time has perhaps come.

“There are plenty of people who have cash on hand, good jobs and pay their bills on time, but got upside down in their homes and let them go,” Scott said. “Banks won’t lend to them even though they are good credit risks.”

Nowadays, Scott says, it’s just as much about “neighbor, helping neighbor … good old-fashioned American Spirit.”

That may be, but there is also financial risk involved when individual home owners offer to play banker. Just how safe is it for a home seller to carry the financing for someone who likely couldn’t get a loan from a bank, especially if that buyer has a tarnished credit rating because they walked away from another property?

Article is from AOL Real Estate.


Bank of America Donating Foreclosed Homes

Bank of America is donating — and in some cases bulldozing — some of its foreclosed houses, according to Boston.com. The paper reports that the bank will donate 100 Cleveland-area homes located in communities eligible to receive grants from the federal Neighborhood Stabilization Program.

The lender is not being purely charitable, though: The giveaways actually help the bank more than they hurt it. By ridding itself of the dregs of its foreclosed homes, the bank foregoes the hassle and cost of selling them.
It makes financial sense when you think about it: There are many costs to selling a foreclosed home. One biggie is upkeep. Abandoned homes deteriorate quickly and are vulnerable to a range of value-killers like infestation and vandalism. This susceptibility is illustrated by the mold epidemic blighting foreclosed homes across the country, which NPR reported about recently.

Banks are not in the business of selling houses, and now they’re cutting the worst ones loose. So bid adieu to the 100 shoddiest digs in the Cleveland area.

Article is from AOL Real Estate.


5 Reasons Why Real Estate Deals Collapse

Almost a third of the escrows that open today fall apart, a disheartening fact for buyers, sellers and agents — but mostly sellers, who often have been waiting a good long while for a viable buyer to come down the pike.

 

The good news is that we know why deals are imploding and have some solutions:

1. Banks aren’t lending money.

Oh, they say they are alright. But we know better, don’t we? Jump through hoops and promise them your firstborn and then maybe — maybe — you can get a loan if you put down 20 percent or more.

Tighter lending standards have made it hard for even credit-worthy buyers to get a mortgage. More than 25 percent of mortgage applicants are rejected and many more are simply afraid to even apply. And despite what you read about cash buyers, they come along as often as the tooth fairy. Less than 30 percent of sales are to cash buyers.

Solution: If you want to buy a house, find out first if you will qualify. Why waste everyone’s time, including your own, if you need to get financing and won’t be able to? Buyers need to get pre-approved by a lender and know once and for all where they stand. And understand that a pre-qualification letter is different from a pre-approval letter. A pre-qualification letter isn’t worth the paper it’s printed on; it is issued by a lender based on your answers to a few questions and maybe a credit check. It doesn’t obligate the lender to give you a nickel. A pre-approval letter means the lender has looked at your pay stubs, your financial records, your tax statements and says you are someone to whom — assuming nothing changes — they would consider lending money.

Another solution for sellers to consider is holding the mortgage for the buyer. Not without risks, but for those in situations with a lot of equity, it’s a choice to consider.

2. Buyers want perfection.

Inspection reports that turned up lots of little niggling things either used to be ignored or — at most — opened the door to some further minor price negotiations. All nickel-and-dime stuff. Today’s buyers, bombarded by bad economic news and consumed with worry about their own situations, get spooked by the smallest loose roof tile and they bolt from the deal.

Solution: Sellers should get their homes inspected before listing them. Fix what needs to be fixed and address everything else in the listing price set. The listing agent should make this inspection available to every serious looker. By doing this, you eliminate buyer surprise. The buyer may — and should — still have his own inspection done, but as a seller, you will be able to point to the report and say “we already told you about that.”

3. Appraisals come in too low.

This happens for a few reasons, but chief among them are appraisal pools — something that was created in 2009 as a result of new rules aimed at lessening lenders’ influence on home appraisers. What the lenders did was outsource appraisals to different firms, and in the process got appraisers who often aren’t as familiar with the communities of the homes that they are valuing.

Out-of-town appraisers who don’t understand local neighborhoods only have the numbers on the books to guide them. That means that short sales and foreclosures that lower your neighborhood comps are counted, but there’s no awareness of the desirability of your street.

Getting a low appraisal is big-time crazy-making. Suddenly the buyer who thought he got a great deal begins to question his wisdom. It also means that a lender might not fully fund what the buyer expected, and the buyer has to cough up some more money — if he even can.

Solution: Bring back the local guys who knew what they were doing. Our rule of thumb: If an appraiser can’t find your house without his GPS, he’s out of our comfort zone.

4. Short sales are a nightmare.

Well, it’s true. Short sales take longer to complete, are frustrating in the process, and while you are waiting for the bank to get its act together, prices around you are dropping further.

In the eternal quest for a bargain, some buyers have focused their home search on foreclosures and short sales. Ultimately, the lower price they may pay comes with a price tag that isn’t always visible: For short sales, it’s lost time. For foreclosures, it’s not knowing what problems the house has because bank-owned properties don’t come with seller disclosures.

Solution: Enough with coddling the banks. Why hasn’t the government set a time frame by which banks must give a thumbs-up or thumbs-down on short sales? Short sales are basically a negotiation between the homeowner and the bank: Will the bank take less than what is owed and leave the poor upside-down seller’s credit and remaining assets intact? Everyone gets that a short sale attempt is the last-gasp breath before foreclosure, so banks know the outcome if they say no. End of story.

Furthermore, why should banks get away with not having to disclose a home’s defects? Banks should be required to have the property inspected and disclose to buyers what they are getting. Even day-old bread in the supermarket gets marked as such. Why not a house costing hundreds of thousands of dollars?

5. Buyers get cold feet.

Buyers are just plain scared, and who can blame them? They could lose their jobs, lose their medical coverage and get wiped out financially because of illness. Truth is, just about anything could happen — to any of us.

Solution: There are many good reasons to buy a home and many good reasons to remain renting. Some of those reasons are financial, but many are not. Homeownership isn’t for everybody, but if it is for you, take the plunge. Talk to a financial adviser, a tax guy, your family, a shrink. Remember: Life is what happens while you are waiting for things to happen.

Article is from AOL Real Estate.


Is Now the Best Time to Refinance Your Mortgage?

Some homeowners in their 50s are taking advantage of historic low rates to refinance their homes and score themselves a mortgage-free retirement.

Mark and Jan Sass, 55-year-olds who live in Cincinnati, Ohio, refinanced their home last week to lock in lower rates, Reuters reported. They switched from a 20-year fixed-rate loan of 4.875%, with 12 years remaining, to 10-year mortgage with a 3.5% rate.

“The opportunity to look 10 years out and know that – unless things change – we won’t have a mortgage when we retire looked like a smart decision,” Sass told the news agency.

A Refi surge

They aren’t alone. U.S. banks have seen a recent surge in loan applications that’s almost entirely due to refinancing, Greg McBride, senior financial analyst at Bankrate.com, told DailyFinance.

Mortgage applications for the week of Aug. 5 rose more than 21% over the previous week and three quarters of those applications were for were for refinancing, according to the Mortgage Bankers Association, also known as MBA.

“Over the past month, refinance application volume has increased by 63%,” Mike Fratantoni, MBA’s vice president of research and economics, said in a statement. “Refinance applications for jumbo loans increased by almost 75% relative to last week. Despite these low mortgage rates, applications for home purchase have remained little changed through the summer.”

According to a Bankrate.com survey released Thursday, the average 15-year fixed rate for a mortgage reset is 3.61%, while 30-year fixed-rate mortgages average out at slightly less than 4.5%. The jumbo 30-year fixed rate set a new record of 5.02%, the Bankrate.com survey found.

Should You Refinance?

So with all the chatter about low interest rates, is refinancing right for you? To answer that question — or to pick the right mortgage for a refinancing deal — homeowners should consider their home equity, credit history, time horizon, age and cash flow.

See the full story at DailyFinance.