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Real estate honesty is best policy

By Tara-Nicholle Nelson, Monday, January 31, 2011.
Flickr image courtesy of <a href="http://www.flickr.com/photos/protactinium/2953403454/">hapticflapjack</a>.

If you know me, you know one of my favorite self-help reads is the Louise Hay classic, "You Can Heal Your Life." ("Woo-woo" alert issued now.) The book is known as one of the first bestsellers to truly acknowledge and explore the mind-body connection.

In fact, Hay even has a chart at the end of the book listing various medical symptoms or illness, the mental or psychological issue that frequently underlies it, and an affirmation that can help change that mental pattern and, as a result, cure the symptom.

In Hay's diagnostic system, chronic throat issues can indicate that the sufferer has a pattern of stifling back their opinions, thoughts or even needs. The prescription? This affirmation (among other things): I speak up for myself freely and easily.

In this, the third of four articles on the fundamental elements of being a successful real estate consumer, I submit that speaking up for oneself freely and easily is one of these fundamentals.  more...

FHA extends 'anti-flipping' waiver

By Inman News, Monday, January 31, 2011.

Homebuyers relying on FHA-insured financing will still be able to buy homes that have changed hands in the last 90 days, thanks to a decision by the Federal Housing Administration to extend a temporary waiver of its "anti-flipping" rule through the end of the year.

The anti-flipping rule -- a 90-day waiting period implemented in 2003 to protect the FHA's mortgage insurance program from losses -- already included an exemption for homes repossessed by Fannie Mae, Freddie Mac, and state- and federally chartered financial institutions.

But last year, FHA took the additional step of waiving the waiting period for all resales -- including homes purchased and rehabbed by private investors.

Since the broad waiver went into effect on Feb. 1, 2010, FHA said it has insured 21,000 90-day property flip loans worth more than $3.6 billion that would otherwise not have qualified for financing.  more...

FICOs and FHA: 2 big lenders loosen up

By Ken Harney, Monday, January 31, 2011.
Flickr photo courtesy of <a href="http://www.flickr.com/photos/trippchicago/3769904793/">-Tripp-</a>.

Here's some unexpected good news for anybody working to get buyers into houses, especially first-timers who don't have much down payment cash on hand: The door to an FHA-insured mortgage just opened a little wider.

With no fanfare or public announcements, two of the largest FHA-approved lenders have backed off their controversial "overlay" requirements on FICO scores (lender overlays are qualification requirements that can be more stringent than FHA's own requirements).

Both Wells Fargo and Quicken Loans confirmed to me last week that they will now lend to applicants with 580 FICOs and 3.5 percent down payments.

Their revised standards conform in most respects to FHA's own minimums, and open the agency's financing to large numbers of buyers whose credit scores have sagged during the recession. Wells Fargo is the largest originator of FHA-insured mortgages; Quicken ranks third, according to industry data.  more...

Who's the boss: real estate agent or client? Premium Content

By Bernice Ross, Monday, January 31, 2011.
Flickr image courtesy of <a href="http://www.flickr.com/photos/mararie/301062790/">mararie</a>.

Most Realtors do their best to adapt to their clients no matter how demanding they are. If you want to make your deals flow more smoothly in 2011, it may be time to screen the clients you work with in an entirely different way.

"Working for" or "working with"

On a recent coaching call, Byron Van Arsdale, my husband and business partner, came up with a powerful strategy for screening whether someone is a good fit for your business. He asked a real estate professional to go through her current client list and to identify whether she was "working with" a particular client or if she was "working for" the client.

Byron then asked her to identify how easy or difficult each individual was in terms of the demands they made and how they treated her.

It became apparent immediately that the most demanding and unreasonable clients were those whom the agent was "working for" rather than "working with" in a more partnership-based approach. The "working for" clients were also the most likely to dump her for another broker or fail to close the transaction once they were under contract.  more...

Real estate 'Rookie of the Year' is no newbie Premium Content

By Mary Umberger, Monday, January 31, 2011.

As "rookies" go, Julie Scott isn't exactly a real estate newbie. She's not even terribly new to the business of selling new homes, having taken on that specialty five years ago when she went to work for a custom builder.

But she's novice enough for an arm of the National Association of Home Builders, which earlier this month named the Suffolk, Va., agent its "Rookie of the Year" for her strong performance in a period that was an "annus horribilis" (Latin for "horrible year") for builders in general, by anyone's measure.

Things were so glum in homebuilding -- 2010 was the worst year since the U.S. Department of Commerce started tracking it in 1963 -- that the NAHB's National Sales and Marketing Council scaled back its "top rookie" criteria from those who had been in the business under two years to include those who had been selling for builders for six years or less, according to a spokesman for the awards coordinators.

Scott, however, wasn't having a terrible year. Aided by the homebuyers' tax credit and market demand from military personnel in the Norfolk area, she helped move a more-than-respectable number of houses: Averaging three transactions a month for a local tract builder, she sold about $8 million worth of new homes from November 2009 through October 2010.  more...

Real estate settlement services on the cheap

By Jack Guttentag, Monday, January 31, 2011.

The previous article in this series on certified lender networks described how such networks will provide competitive loan pricing. This article describes how the networks will provide competitive pricing of the third-party services that are required accessories to home mortgage loans. In some respects, this is an even greater challenge.

Third-party services are overpriced

Every consumer taking a home mortgage today pays a private tax in the form of unnecessary charges for the various third-party services required to deliver the mortgage. These includes services provided by title insurance companies, mortgage insurance companies, appraisers, credit reporting agencies, flood insurance companies, escrow companies and others.

The taxes are paid to those who are positioned to refer borrowers to specific service providers. These referral agents are mainly lenders, but some are Realtors and builders. The payments include referral fees, which are sometimes legal and sometimes illegal. Some of the tax is absorbed by the high marketing expenses incurred by service providers soliciting the business of referral agents.  more...

U.S. deficit speaks louder than words Premium Content

By Lou Barnes, Friday, January 28, 2011.

Stock prices and rates in Treasurys and the mortgage market continued in their quiet, narrow ranges, but expectant tension is rising, with optimists in a special lather.

The 3.2 percent gain in fourth-quarter U.S. gross domestic product was stronger than it looked: Households at last spent some money, with annualized growth at 4.4 percent; exports had a great 90 days, accounting for the whole GDP rise, which would have doubled the official figure were it not for peculiar inventory calculations.

Next Friday we will learn if the happy ending to 2010 has carried through to payrolls in January.

European debt worries have reversed very fast on legitimate signs the zone may opt for the sacrifices leading to unity, and in two weeks the euro has jumped from $1.29 to $1.37. Emerging nations are running red hot, pulling our exports. It's unsustainable but enjoyable, with inflation-threat commentary in every economic report.  more...

House Stories: If these walls could talk ...

By Inman News, Friday, January 28, 2011.


Winchester Mystery House, San Jose, Calif. Flickr image by Harsh Light.

We know that, as real estate professionals, you've run across some homes with captivating stories and backstories. Inman News is planning a recurring series of house profiles featuring houses that -- if their walls could talk -- would tell some fascinating tales.  more...

Don't rush to buy with bad credit

By Tara-Nicholle Nelson, Friday, January 28, 2011.

Q: I found an affordable house in South Carolina, but my husband's credit scores are not up to par. What can we do?

A: There's an organ in the human brain called the reticular activator. This is the place in your brain that causes pregnant women to suddenly notice scores of baby bumps everywhere. Buy a new car, and within 24 hours after driving it off the lot, you'll see more cars of the same make and model as you now drive than you have ever seen in your whole life combined.

So, it might just be that my reticular activator is on Valentine's Day mode, but as the day we've set aside to celebrate love draws near, I'm receiving more and more questions from readers about challenges in buying homes and qualifying for a mortgage with their mates -- husbands, boyfriends and girlfriends. And yours is one of the more common ones: One partner's income, job history or credit doesn't pass muster. What next?  more...

Top drawbacks to salvaged fixtures

By Arrol Gellner, Friday, January 28, 2011.
Flickr image courtesy of <a href="http://www.flickr.com/photos/tracy_the_astonishing/2720663716/sizes/z/in/photostream/">tracy the astonishing</a>.

Last time we paid a visit to the architectural salvage yard -- a place where, if you're diligent, you can find quality building materials that are cheaper and greener to boot. Today we continue the shopping list with more potential bargains, though they may require some careful vetting.

Structural items: Many salvage yards stock a plethora of materials such as brick, wood and steel beams, sheet metal, structural hardware, and the like. If you happen to find exactly what you're looking for (or, more likely, something that's close enough), you can save a lot of money -- often 50 to 75 percent over lumberyard prices. Occasionally, you may have to massage your plans a little to make use of a real bargain, but that's the nature of buying anything recycled.

Lighting fixtures: In general, older lighting fixtures are of much higher quality than modern ones, with heavier parts and more durable finishes. However, you should expect to rewire all vintage lighting fixtures, since their old-style cloth insulation becomes brittle with age and can cause short circuits. Professional rewiring can add appreciable cost to a "bargain" salvaged fixture, but the added expense is still usually justified for a top-quality vintage fixture. If you're reasonably handy with things electrical, you may also be able to do this work yourself.  more...

Installing a bathroom fan's a breeze

By Paul Bianchina, Friday, January 28, 2011.
Flickr image courtesy of <a href="http://www.flickr.com/photos/exfordy/389024187/">exfordy</a>.

From mildew in the corners to mists on the mirrors -- not to mention those less-than-pleasant odors -- it's not tough to figure out when a bathroom doesn't have adequate ventilation. Sizing and installing the right bathroom ventilation fan can make a big difference, and it's not a tough undertaking.

How big a fan do you need?
Ventilation fans are required by code in any bathroom that doesn't have an operable window. But realistically, how often do you open the window while you're showering -- especially in the winter? So as a practical matter, required or not, your bathroom really needs to have a fan in it.

The first step in the process is to determine the fan's size. You could install the typical small, noisy and generally ineffective "builder's grade" fan, but what you really want to do is take the time to size the fan properly to the room.

The fan should be able to change the air in the room about 10 times per hour, so first you need to know the volume of air that the bathroom contains. To do that, measure the length, width and height of the room, and multiply the three numbers.  more...

Tax laws catch up to independent contractors Premium Content

By Stephen Fishman, Friday, January 28, 2011.

Q: I own a rental property. I pay $200 per month to a gardener. Am I required to report these payments to the IRS?

A: A self-employed service provider such as a gardener, plumber or accountant you hire to perform services for your rental activity is an independent contractor for tax purposes -- and not your employee.

As such, your tax responsibilities toward him or her are modest. The general rule is that whenever you pay an unincorporated independent contractor $600 or more during the year for business-related services, you must:

  • File Internal Revenue Service Form 1099-MISC reporting how much you paid the workers; and
  • Obtain the workers' taxpayer ID number.

The IRS imposes these requirements because it is very concerned that many independent contractors don't report all the income they earn. To help prevent this, the IRS wants to find out how much you pay independent contractors and make sure it has their correct tax ID numbers.  more...

New FHA condo financing rules squeeze sellers

By Steve Bergsman, Friday, January 28, 2011.
Flickr image courtesy of <a href="http://www.flickr.com/photos/rvaphotodude/2277816439/" target=blank>rvaphotodude</a>.

Back around the beginning of December 2010, there were a number of notifications in the press exclaiming Federal Housing Administration condominium requirements for recertifying projects were going to expire, which did nothing but cause a lot of people, including me, to scratch our collective heads, wondering what that was all about.

That deadline was to be Dec. 7, 2010; except when that date rolled around the FHA decided to extend the various recertification deadlines on a rolling basis through the end of 2010, most of 2011 and even into 2012.

Those who understood what was going on -- a group that admittedly didn't include me -- breathed a sigh of relief; everyone else was still picking at their scalps with their fingernails.

"There were 26,000 condominium developments that would have had to have been recertified by Dec. 7, 2010, and, in fact, my office sent out letters to almost every single one of these developments across the country telling them they were going to lose their approval. Most of them didn't even know," said Orest Tomaselli, CEO of White Plains, N.Y.-based National Condo Advisors LLC.  more...

Home maintenance is a 2-way street

By Robert Griswold, Friday, January 28, 2011.
Flickr image courtesy of <a href="http://www.flickr.com/photos/metrojp/92038203/" target=blank>Orange_Beard</a>.

Q: I had a tenant that called me to let me know that I had water dripping from the ceiling and that my wood floors had "something wrong with them." I sent over my brother-in-law, who is a contractor, and it turns out that there was no roof leak but my tenant had been using the faucet in the kitchen and it had become loose.

Then the pipe underneath the sink got a split in it and leaked under the cabinet and was flooding the kitchen and adjacent dining area. The water has severely warped the wood floors.

My tenant says that she was sick all week and never saw the leak. My brother-in-law tells me that the wood floors are so damaged that clearly the water had been leaking for months. It is his opinion that she should have not been using the kitchen faucet, as the source of water was obvious to anyone using the faucet. Plus, the split pipe was visible by just opening the cabinet and looking underneath the sink. Please let me know who is liable.  more...

Get reimbursed for tenant violations

By Janet Portman, Thursday, January 27, 2011.
Flickr image courtesy of <a href="http://www.flickr.com/photos/thirteenofclubs/3693194862/" target=blank>Thirteen of Clubs</a>.

Q: We own rental property in a college town, and have generally had good experiences with our student tenants. But this year we got a particularly rowdy bunch, and despite our pleas (and the intercession of the neighbors and the police), we were slapped with a fine on account of the renters' loud parties. Can we insist that they reimburse us? Is this grounds for eviction? --Ann and Goren M.

A: Let's look at your second question first -- can you terminate the lease based on the renters' loud parties? You probably can, based on your tenants' violation of your town's noise ordinance (the police had the authority to intervene because violating the ordinance is an infraction, subjecting the perpetrators to a fine). In other words, the tenants broke the law.

Whenever tenants use rental property in an illegal way -- as a meth lab, to give an extreme example -- landlords have the right to declare the tenancy over.

Not every illegal act that occurs on the property can justify eviction. For instance, writing a check on insufficient funds can be a violation of a state's criminal law, but it's doubtful that a landlord could evict simply because the tenant sat at the kitchen table while writing the check. The closer the relationship between the illegal act and the property, the more likely a judge would be to uphold a termination.  more...

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