I can proudly say that I have sold every listing I ever took. Yet, on two occasions, even though I sold the property, I feel I failed the clients. The first time was on my very first listing, 16 years ago. It still haunts me to this day. . .
I was green and eager to please, like most new agents. It was an expired listing and I was their fourth agent. I worked oh, so, very, hard and I got an offer on the property, but it took over six weeks. The longest it ever took me to bring in an offer.
I knew something was wrong fairly early on. I could just feel it. On my third visit to the home I noticed with my newly forming Realtor eyes that the bathroom counters were tiled, very nicely tiled. I hadn’t noticed them before because they were covered in little decorative bottles: hundreds and hundreds of little bottles. I looked around me and realized there were figurines – everywhere. There were glass and porcelain pieces on shelves and countertops throughout the house. I felt as though the home had been invaded by trinkets. I was surrounded by tiny collectibles. I was standing in the land of the chotchkes.
I may have been looking at the home, but buyers couldn’t see past the owner’s “little pretties”. I spoke to the owners about these little treasures, but she insisted upon leaving them out. She couldn’t live in a home without her “little pretties”. I should have been more forceful. Being so new to the business I was too eager to please. Those little pretties cost her about ten percent of the home’s value. It sold for about 90 percent of what it was worth.
Buyers discount mysteries. Anything they can’t see, whether it’s because the shades are drawn, the lights are turned off, a door is locked, or it’s covered in little trinkets, becomes a mystery. Mysteries will cost the owner money. Please, please sellers, I cannot emphasize this enough: destroy all of the mysteries in and around your home. Pack up the art work. Put in new light bulbs. Clean out the closets. Get those inspections. And do not allow your property to be invaded by chotchkes. By getting rid of the mysteries, you are telling the buyers that you are serious about selling your home. You can demand and receive full price for full disclosure.
http://www.yelp.com/biz/kansas-city-corporates-kansas-city
Wednesday, September 26, 2012
Wednesday, September 12, 2012
Frequently Asked Questions
Frequently Asked Questions
How do I pay for the living accommodations and services at Kingwood Village?
What are the terms of leases?
Can I bring my pet to Kingwood Village?
Do Kingwood Village communities allow smoking?
How are rent amounts set?
What are the visiting hours?
What does it mean to "age in place."
Are all assisted living and retirement living communities alike?
Can I bring my own furnishings to my apartment?
Q: How do I pay for the living accommodations and services at Kingwood Village?
A: Kingwood Village residents' expenses are either paid for privately, or through a third-party source such as a long-term care insurance policy.
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Q: What are the terms of leases?
A: Westminster House offers a one year lease with a 30-day written notice of termination. Wilshire House requires a two year lease.
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Q: Can I bring my pet to Kingwood Village?
A: We know that pets can be an important member of the family - but we do require a $500 non-refundable pet deposit.
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Q: Do Kingwood Village communities allow smoking?
A: Yes
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Q: How are rent amounts set?
A: A resident's rent is determined by the size of his or her apartment.
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Q: What are the visiting hours?
A: When you live at Kingwood Village, it's no different than living at home—you and your guests are free to come and go as you please.
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Q: What does it mean to "age in place."
A: "Aging in place" is a term that can be misleading. In some cases, residents require services that are beyond those allowed by state regulations. In most cases, however, residents can live with us and pass away in their own homes.
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Q: Are all assisted living and retirement living communities alike?
A: No.
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Q: Can I bring my own furnishings to my apartment?
A: Absolutely. This is your home and you may decorate as you like.
Tuesday, September 11, 2012
PREVENTING FALLOUT: 5 QUESTIONS EVERY AGENT SHOULD ASK (PART IV)
Okay, after covering down payment, income, and credit in Parts I, II, and III, let’s move on to the fourth important question.Question #4: Are You Pre-Qualified or Pre-Approved?
When I speak with Realtors, there is inevitably some question about the difference. And lenders will frequently take advantage of the confusion.
An agent of mine recently had a deal fall out at the 11th hour with a client whose lender had provided a pre-approval letter with the original offer. When my angry agent confronted the lender, the lender shrugged and laughed as if to say hey, I lied, so what.
To avoid that type of deception, here’s a convenient place to draw the line in the sand.
A pre-qualification letter represents the loan officer’s opinion about the buyer’s qualifications. A pre-approval letter says that the file has been formally approved by a lender.
Pre-Qualification
Since this is merely an opinion letter, you need to know who is rendering that opinion (see Part V). Would you trust a serious medical diagnosis to a med student? No, you wouldn’t. Since you don’t know this person and since the market is full of bogus pre-qual letters, you have reason enough to ask your client to speak briefly with your lender. In doing so, you’ll be able to confirm the buyer’s qualifications and strategy. For instance, do they need a credit for closing costs?
I coach my agents to explain that by talking with me, they’ll be able to obtain a pre-qual letter from a well known and respected local lender. In multiple offer situations, I have had my client’s offer accepted because the listing agent recognized my name.
Pre-Approval
Pre-approval letters should only be issued after the loan has been submitted and approved. This is easier than it used to be, because most loans today are submitted through the the Automated Underwriting Systems. A formal approval with a list of conditions is issued if the loan is accepted.
Here’s a tip: get a copy of that approval. If the lender balks, the approval may be bogus. And if the borrower is approved, you’ll get to see the approval conditions. That’s critical, because there are sometimes conditions the borrower can’t meet. For example, what if that stated income approval comes back approved as long as the borrower can provide tax returns. Effectively, that’s a counter offer that the borrower probably can’t accept. An approval is only as good as its conditions are reasonable.
There you go. On to Part V
IS THIS THE END OF CREDIT SCORE PIGGYBACKING?
You may be familiar with the credit improvement trick of piggy-backing on someone else?s good credit to improve low Fico scores. Usually this is done to build scores for a son or daughter with no credit or to rebuild credit for someone who has had problems.
I feel dumb for being even a little surprised that there are on-line businesses encouraging and facilitating the use of this tactic?and worse?between complete strangers to game credit scores and defraud lenders. See the Mortgage Fraud Blog?s post for a good analysis of the problem.
Here?s another article I saw today, apparently one of many that appeared last weekend on this topic. The bottom line is that this tool is about to be shut down because of abuse. Don?t blame the mortgage industry for this one. It?s like drugs. The fundamental problem is demand.
Regulators Seek End to Shady Credit Score Sites
Mortgage industry regulators are trying to crack down on Web sites that offer consumers a fast way to boost their credit scores and look a lot more appealing on loan applications. These sites promise to connect a home shopper’s credit history to a stranger’s credit card or provide pay stubs from bogus companies. One even offers consumers the opportunity to rent a well-stocked bank account for a month.
?We think these types of Web sites are increasing,’ says Frank McKenna, chief fraud strategist at BasePoint Analytics, which helps banks and mortgage lenders identify fraudulent transactions.The operators of these sites are hard to track down because the y shut down and disappear when investigators come calling. These sites also are hard to police because it is unclear which laws, if any, the they’re breaking, says McKenna.
The repercussions for the consumers are clear, as it’s illegal to lie on a form, but there aren?t laws that specifically prohibit what the Web sites are doing. One site, RaiseCreditScoreNow.com offers to add a person to four separate $20,000 credit lines with 10 years of perfect pays for $4,000. The site says that doing so could increase an individual?s credit score by 200 points in 90 days. Another company, SeasonedTradeLines.com, says it has an inventory of 100 real, verifiable credit card accounts with perfect payment histories dating back to 1974. Fair Isaac Corp., which developed FICO credit scores, says it is trying to shut down this practice, which it calls piggy-backing.
Got a question or concern? Need help with a loan? Email me. I can do loans in the most of the Western U.S.
I feel dumb for being even a little surprised that there are on-line businesses encouraging and facilitating the use of this tactic?and worse?between complete strangers to game credit scores and defraud lenders. See the Mortgage Fraud Blog?s post for a good analysis of the problem.
Here?s another article I saw today, apparently one of many that appeared last weekend on this topic. The bottom line is that this tool is about to be shut down because of abuse. Don?t blame the mortgage industry for this one. It?s like drugs. The fundamental problem is demand.
Regulators Seek End to Shady Credit Score Sites
Mortgage industry regulators are trying to crack down on Web sites that offer consumers a fast way to boost their credit scores and look a lot more appealing on loan applications. These sites promise to connect a home shopper’s credit history to a stranger’s credit card or provide pay stubs from bogus companies. One even offers consumers the opportunity to rent a well-stocked bank account for a month.
?We think these types of Web sites are increasing,’ says Frank McKenna, chief fraud strategist at BasePoint Analytics, which helps banks and mortgage lenders identify fraudulent transactions.The operators of these sites are hard to track down because the y shut down and disappear when investigators come calling. These sites also are hard to police because it is unclear which laws, if any, the they’re breaking, says McKenna.
The repercussions for the consumers are clear, as it’s illegal to lie on a form, but there aren?t laws that specifically prohibit what the Web sites are doing. One site, RaiseCreditScoreNow.com offers to add a person to four separate $20,000 credit lines with 10 years of perfect pays for $4,000. The site says that doing so could increase an individual?s credit score by 200 points in 90 days. Another company, SeasonedTradeLines.com, says it has an inventory of 100 real, verifiable credit card accounts with perfect payment histories dating back to 1974. Fair Isaac Corp., which developed FICO credit scores, says it is trying to shut down this practice, which it calls piggy-backing.
Got a question or concern? Need help with a loan? Email me. I can do loans in the most of the Western U.S.
SHORT SALES VS. FORECLOSURES….YOUR CREDIT WILL SUCK EITHER WAY
I get a lot of calls these days from real estate agents wondering what effect a short sale or deed in lieu of foreclosure (DLF from here forward) will have on borrowers? credit. That is a really important and interesting question, since the last real estate downturn preceded the widespread use of Fico scores and automated underwriting (AU) systems.
Everyone now seems aware that debt cancellation creates taxable income. In a short sale, the amount of the lender?s loss is reported to the borrower as income, creating an income tax liability for the borrower. If the borrower is insolvent at the time, the tax liability can be avoided, but only to the extent that liabilities exceed assets.
But how will credit scores be affected? And if a loan is approved through LP or DU, Freddie Mac?s and Fannie Mae?s automated underwriting engines, will the underwriter overturn the approval when she sees the typical ?settled? comment on the mortgage tradeline?
For answers to these questions, I turned to my credit reporting agencies and representatives from the capital markets to see what is boiling inside the pot.
Credit Bureaus and Fico Scores
The word from inside is that short sales and DLFs are a hot topic. The scoring models are being revised to put them in parity with foreclosures. Although some agents are suggesting that short sales are not as damaging to credit as foreclosures, that would be a bad bet. Though it may be some time before we see credit scores for borrowers emerging from short sales, just assume they are going to tumble.
Given the inherent conflict of interest?a Realtor makes a commission on a short sale and doesn?t in a foreclosure?the real estate professional should proceed cautiously when counselling a seller. A short sale that leads to a tax liability and possibly to further financial hardship or bankruptcy could easily backfire on the party who profited most from the transaction. If the resulting credit scores also render the buyer unable to purchase another home or cause increased costs for auto loans or credit cards, it is easy to imagine the borrower taking a dive and hoping for a red card.
Automated Underwriting Approvals
Typically, there is no public record of a short sale to undermine an AU approval. Although AU may still see it, we?re not certain of the effect it will have. So I asked a couple of underwriters and the V.P. of American Pacific Funding what would happen if an AU submission was approved and the underwriter later notice a ?settled? comment on the mortgage tradeline. They didn?t know, but the question triggered a vigorous and immediate investigation.
Running that question up the flagpole in the capital markets illicited a blunt response and revealed a clarity of purpose from which we should take our cue. There will be no leniency shown toward short sellers. Investors dictate underwriting rules, and their instructions could not be more clear. Show no mercy. Punish the borrower who defaults. Make it difficult for them to do it again.
Waiting for Guido
Mortgage money belongs to people who expect to be paid back. Layoffs, health problems, and job transfers are the borrower?s problem. If the market takes a turn for the worse, the borrower needs to figure out how to make the payments until things improve. If the investor is dragged in to the mess by a short sale or deed in lieu of foreclosure, Guido will be paying a visit. He may leave your knees intact, but he won?t be so kind to your credit. And you won?t be buying a home anytime soon.
Everyone now seems aware that debt cancellation creates taxable income. In a short sale, the amount of the lender?s loss is reported to the borrower as income, creating an income tax liability for the borrower. If the borrower is insolvent at the time, the tax liability can be avoided, but only to the extent that liabilities exceed assets.
But how will credit scores be affected? And if a loan is approved through LP or DU, Freddie Mac?s and Fannie Mae?s automated underwriting engines, will the underwriter overturn the approval when she sees the typical ?settled? comment on the mortgage tradeline?
For answers to these questions, I turned to my credit reporting agencies and representatives from the capital markets to see what is boiling inside the pot.
Credit Bureaus and Fico Scores
The word from inside is that short sales and DLFs are a hot topic. The scoring models are being revised to put them in parity with foreclosures. Although some agents are suggesting that short sales are not as damaging to credit as foreclosures, that would be a bad bet. Though it may be some time before we see credit scores for borrowers emerging from short sales, just assume they are going to tumble.
Given the inherent conflict of interest?a Realtor makes a commission on a short sale and doesn?t in a foreclosure?the real estate professional should proceed cautiously when counselling a seller. A short sale that leads to a tax liability and possibly to further financial hardship or bankruptcy could easily backfire on the party who profited most from the transaction. If the resulting credit scores also render the buyer unable to purchase another home or cause increased costs for auto loans or credit cards, it is easy to imagine the borrower taking a dive and hoping for a red card.
Automated Underwriting Approvals
Typically, there is no public record of a short sale to undermine an AU approval. Although AU may still see it, we?re not certain of the effect it will have. So I asked a couple of underwriters and the V.P. of American Pacific Funding what would happen if an AU submission was approved and the underwriter later notice a ?settled? comment on the mortgage tradeline. They didn?t know, but the question triggered a vigorous and immediate investigation.
Running that question up the flagpole in the capital markets illicited a blunt response and revealed a clarity of purpose from which we should take our cue. There will be no leniency shown toward short sellers. Investors dictate underwriting rules, and their instructions could not be more clear. Show no mercy. Punish the borrower who defaults. Make it difficult for them to do it again.
Waiting for Guido
Mortgage money belongs to people who expect to be paid back. Layoffs, health problems, and job transfers are the borrower?s problem. If the market takes a turn for the worse, the borrower needs to figure out how to make the payments until things improve. If the investor is dragged in to the mess by a short sale or deed in lieu of foreclosure, Guido will be paying a visit. He may leave your knees intact, but he won?t be so kind to your credit. And you won?t be buying a home anytime soon.
Short Sales vs. Foreclosures
Dale Says:
December 29th, 2006 at 7:46 am
You are kidding, right? A “savings” to a buyer of 236 per month? How can you possibly say your are saving the consumer money, when the other 30 year loan at least offers a portion of the payment to go to the principle. You know darn well as I do that people opt for the interest only loan to barely squeeze into a house they normally could not possibly afford. They move in, have a kid or two, finance a new vehicle or two, and all of a sudden they are stuck hardly able to pay the interest-only house payment because they filled their life full of other liabilities. Of course, this is not your problem, since you are only selling them the interest only loan. Why these types of loans are not outlawed is beyond me…but I’ll save that rant for another day.
Marc Says:
January 9th, 2007 at 12:07 pm
Hey Dale,
Again, I’m talking about creating affordable payments. As you say, there are a lot of people who buy houses they can’t afford using “exotic mortgages”. I advise strongly against this, and I’ve refused to do loans for clients when I could see that they could not afford the the future payments. Putting clients into that situation is bad for the everyone: the client, the investor, and for me. Nobody wins.
Fortunately, not every buyer is as irresponsible as you describe. There are those who’ve managed their finances responsibly and whose income might be temporarily low–one spouse laid off, a recent relocation, a young couple with degrees just getting started–such that there income will rise predictably, making the amortized payment entirely affordable.
When those kinds of folks need a way to buy with an affordable payment, interest-only loans work very well. An interest-only loans create the flexibility to give the payment a shape, but certainly not to help the borrower you describe. By the way, I primarily use 30 year fixed rate interest-only loans.
Thanks for taking the time to post.
Marc
December 29th, 2006 at 7:46 am
You are kidding, right? A “savings” to a buyer of 236 per month? How can you possibly say your are saving the consumer money, when the other 30 year loan at least offers a portion of the payment to go to the principle. You know darn well as I do that people opt for the interest only loan to barely squeeze into a house they normally could not possibly afford. They move in, have a kid or two, finance a new vehicle or two, and all of a sudden they are stuck hardly able to pay the interest-only house payment because they filled their life full of other liabilities. Of course, this is not your problem, since you are only selling them the interest only loan. Why these types of loans are not outlawed is beyond me…but I’ll save that rant for another day.
Marc Says:
January 9th, 2007 at 12:07 pm
Hey Dale,
Again, I’m talking about creating affordable payments. As you say, there are a lot of people who buy houses they can’t afford using “exotic mortgages”. I advise strongly against this, and I’ve refused to do loans for clients when I could see that they could not afford the the future payments. Putting clients into that situation is bad for the everyone: the client, the investor, and for me. Nobody wins.
Fortunately, not every buyer is as irresponsible as you describe. There are those who’ve managed their finances responsibly and whose income might be temporarily low–one spouse laid off, a recent relocation, a young couple with degrees just getting started–such that there income will rise predictably, making the amortized payment entirely affordable.
When those kinds of folks need a way to buy with an affordable payment, interest-only loans work very well. An interest-only loans create the flexibility to give the payment a shape, but certainly not to help the borrower you describe. By the way, I primarily use 30 year fixed rate interest-only loans.
Thanks for taking the time to post.
Marc
CREATING AFFORDABLE PAYMENTS (PART IV): INTEREST ONLY LOANS
In Part II of the Creating Affordable Payments series, we looked at 40 and 50 year loans to see if the advertising claims about lower were true, and we found that these loans do not really help, and the overall interest cost is much higher.In Part III , we looked at Intermediate ARMs to see if they were the answer to today?s most common challenge. Unfortunately, with the inverted yield curve in U.S. Treasury securities, the rate on a 5/1, 7/1, or 10/1 ARM is often higher today than the 30 year fixed.
So today let?s have a look at interest-only loans to see what they can do.
First, let me start with an observation based on personal experience. Most consumers believe that interest-only loans are bad. I rarely encounter a client whose mind isn?t already closed to the notion when the topic first arises. The press has done an effective job of scaring the consumer by associating interest-only loans with the real estate bubble and predatory lending. But interest-only loans?particularly the 30 year fixed variety?are wonderful financial planning tools, and they are safe. Read Four Great Reasons to Choose an Interest-Only Loan.
To keep to the point, interest-only loans are one of the most effective tools we have for safely creating affordable payments.
Here is a comparison of monthly payments for 30 year fixed and a 30 year fixed, interest-only loan:
30 year fixed, $300,000 @ 6.00% = $1799
30 year fixed, $300,000 @ 6.25% = $1562 (interest-only)
That?s a savings of $236 per month, a significant amount for a buyer in that price range. And that is despite the fact that there is generally a slight premium in the rate for any loan?s interest-only counterpart.
For any good mortgage advisor, a loan program is just a tool we use to do a particular job. An interest-only loan is a wonderful way to create flexibility and to shape the mortgage payment to better fit the client?s life. The borrower can decide later whether to catch up on principal or increase their pre-tax 401(k) contributions, but for the present, interest-only loans are one of our best tools for creating more afffordable payments.
Got a question about interest-only loans? Email me.
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