Friday, July 22, 2011

Mortgages: 7 Things You Don't Want to Learn the Hard Way

Provided By Realty Times

Experience is a good teacher, but when it comes to mortgages—whether you're arranging a new one or renewing—learning by experience can be expensive.

The more you understand about mortgages and home equity lines of credit (HELOC) before you sign a mortgage contract, the more you can save in interest charges, lender fees, and other borrowing costs.

1. Consider the Source:

The internet is a great research tool, but separating unbiased facts from marketing and misinformation can be tricky.

Often we are most vulnerable when we are intent on learning about something important to us. Our guard is down. Be cautious about which content you act on, and where you share personal information. According to the recent 2011 Mortgage Consumer Survey, released by the national housing agency, Canada Mortgage and Housing Corporation (CMHC), the internet provided recent real estate buyers with on-line mortgage calculators (86%) and financial self assessments (54%). The most popular search-engine key words used by buyers included interest rates (86%), mortgage options (76%) and mortgage calculators (69%). This CMHC survey, and consumer information like it, is equally accessible to legitimate and not-so legitimate companies developing and selling financial services and products. Taking time to research and understand mortgage details is important, just remain sceptical of special deals and too-good-to-be-true offers. Print information you want to act on as proof of what a company is offering, so you can hold them to it.

Resource: CMHC provides free online tools, such as the Household Budget and Mortgage Affordability Calculators, and publications, such as Homebuying Step-by-Step: http://www.cmhc.ca.

2. What's In It for Them?

Real estate and mortgage professionals, and the organizations they represent, may be offered referral fees—as money or incentive points—by lenders that want their business (that's your mortgage).

Professionals should disclose (ideally, in writing) the conflict of interest before you make any decisions or sign anything. Can you receive the best interest rate and mortgage terms when the professional is distracted by an additional incentive?

Ask whether there is a referral fee or incentive involved in all "I've got a great …" recommendations you receive. Be sure you, not the professional, are getting the best deal. For instance, being led to a bank does not give you the range of mortgage choices that a referral to an independent mortgage broker would. Thorough professionals normally offer at least three excellent choices when referring clients to ensure consumers understand the full spectrum of choices open to them.

3. Will Match to Get Your Business

Most people shop around for the best price on appliances, cars, and vacations, but do little comparison shopping for the best mortgage terms. If they did, it could save tens of thousands, or more. Remember, it's not just the interest rate but the total borrowing cost that you want the best deal on.

Use a mortgage broker for comparison shopping, and you'll have the added benefit of their track record with lenders. Since the broker represents more volume than your one mortgage, you may get an even better deal.

One lender advertising a terrific rate or a line of credit feature will not be the only lender ready to provide that service. Just ask, and you may get that feature plus added benefits with a lender you prefer.

4. What Is the Real Cost?

It's not just the interest, but the total cost of borrowing that is vital to understand. What will it cost you to pay off the principal early? What is the charge to set up weekly or biweekly payments? What if you have to switch back to monthly? What is the cost for shifting from variable to fixed? What is the total cost of discharging the mortgage if you sell your real estate? When will legal fees be added? Will cash backs have to be repaid? Ask about all situations since this mortgage will run for decades. Get all the details about cost before you sign.

The long-term implications of your mortgage are more important than a quarter-point difference in interest rate. For instance, should you choose a fixed rate or variable? If you cannot afford to be wrong about this choice, go fixed and pay off principal as quickly as possible. If you have a financial cushion, solid job, and little consumer debt, a variable mortgage may save you money. The risk is worth it since, if rates rise quickly, you'll be able to cover additional expense.

Banks and other lenders do not make billions in profit by missing opportunities to charge fees and take bonuses (that's penalties to you). They can also change their policies and offerings anytime they like.

5. Rates Up, Mortgage Size Down

As interest rates go up, the size of mortgage you qualify for goes down. Even if you are prepared to take on significant debt, you won't be allowed to. With buying power reduced, you may have to settle for a smaller property or a lesser neighbourhood.

When interest rates are on the rise, a preapproval can make a financial difference to buying power. The borrower is approved at a rate that the lender commits to for a period of 60, 90, or more days, even if rates for the same term go higher.

Some lenders include heating and utility costs in calculating what a borrower can afford. This means properties with poor insulation and higher heating costs may only qualify for lower mortgages.

6. Who Knows???

Since most buyers, on average, spend almost a year planning their home or condominium purchase, they are often exposed to a few market and rate changes in the process. There are lots of economists projecting and calculating interest rate patterns, but no one knows what will happen next. It is probable that rates will rise, but when and how fast is anyone's guess.

According to Mark Carney, Governor of the Bank of Canada: "With monetary policy continuing to be set to achieve the inflation target [2%], our institutions should not be lulled into a false sense of security by current low rates. Similarly, households will need to be prudent in their borrowing, recognising that over the life of a mortgage, interest rates will often be much higher."

Resource: When will interest rates go up and by how much? Go to the source—the Bank of Canada. The link to a recent plain-language speech by BC Governor Carney explains what's happened and happening in housing, but even he does not know what exactly will trigger rate changes, and when.

7. Buying Day Is the Big Unknown

How many houses, semis, or condominiums must you view to find the one you want to buy? When will you be able to make an offer and have it presented? Will the offer be accepted? Your new home may be the first or the 15th you see. It may be the first one you make an offer on, or the 5th. Not even the most experienced lender, mortgage broker, or real estate professional can predict how quickly you'll find and buy your home. But they'll all agree that doing your mortgage homework first gives you the flexibility to act quickly when the ideal home appears. Don't get left with "if only I'd..." regrets, or be stuck with an unnecessarily-expensive mortgage.

Need more answers to your loan questions? Give us a call at 972.772.7029 or email us at frontdesk552@kw.com.

Wednesday, July 20, 2011

Design Tips for Homeowners on a Budget

Provided By Realty Times

Having your home look like a million bucks doesn't have to cost you big. Following a few simple design tips and researching the latest styles can help you can transform your dull space into divine living.

The first rule of budget design is to have a clear focus. Work on one room and one design at a time. The reasoning behind this is simple. It's too easy to go over budget if you are shopping for multiple projects at the same time. By focusing on one room, you can be clear on what items you really need.

To know what items you need, come up with a design plan. You might have a great design mind and can plan a room from scratch, but most of us need guidance. Where are good places to get inspiration?


•Friends and family who have enlisted the help of professional decorators in the past may have rooms you'd like to emulate. Take tips from their rooms, but personalize them to your taste. After all, imitation is the sincerest form of flattery.

•Design magazines show you a range of styles. Pick an inspiration room and copy it.

•Furniture showrooms have really stepped up their game in the past few years. They can be full of great new ideas for color schemes, bedding, and more!

•Celebrities can afford to pay top dollar for the industry's leading interior designers. A simple online image search will show you top celebrity homes that have been featured in magazines.
Now that you're inspired, develop a solid design plan. In a notebook or on your computer, draw out your future room. Choose colors and patterns. The clearer the design in your head, the more closely you'll be able to create it. Use this drawing to create a shopping list of items.

Don't do any shopping, though, until you calculate a budget. How much can you afford to spend? Even $100 can make a huge difference in a room. New paint, throw pillows, and curtains can be inexpensive changes, especially if you know the tricks of budget shopping.

Budget design means going outside of retail shopping. Garage and estate sales can be wonderful shopping grounds, especially if you already have an idea of what you need. However, don't compromise style for cost. The last thing you want to do is spend money on something that doesn't' really work.

Clearance is your best friend. Shop sales, use coupons, and always take a look at clearance racks. Don't forget about online clearance as well. Many stores have fabulous deals and minimal shipping costs.

You can do anything you set your mind to. A great way to save money is to do projects yourself. An upholstered headboard, for example, can cost upwards of $500, but building one yourself can cost less than $100. Headboards, shelving, pillows, and artwork are all within the reach of any amateur. YouTube is a wonderful resource for how-to videos. Plus, it's free!

Another money saving tip is to use faux instead of luxury goods. This means faux silk curtains instead of real silk. Choose laminate floors over hardwoods. Use faux fur instead of real fur, which looks just as great and is also cruelty free.

Finally, reuse what you already have. You may have items in others areas of your home that will now work for your newly designed space.

The key to budget designing is to have a clear plan and to stick to you. Do this and you're sure to have a room of which you're proud.

Need more money saving tips for your fabulous home? Give us a call at 972.772.7029 or email us at frontdesk552@kw.com.

Monday, July 18, 2011

State foreclosure procedures

Provided By Trulia

The foreclosure process varies somewhat from state to state, and depends primarily on whether the state uses mortgages or deeds of trust for the purchase of real property. Generally, states that use mortgages conduct judicial foreclosures, using the court system to execute the foreclosure. States that use deeds of trust conduct non-judicial foreclosures, using an out-of-court procedure defined by state law.

To foreclose in accordance with the judicial procedure, a lender must prove in court that the mortgagor is in default. Once the lender has exhausted its attempts to resolve the default with the homeowner, the next step is to contact an attorney to pursue court action. The attorney contacts the mortgagor (homeowner) to try to resolve the default. If the mortgagor is unable to pay off the default, the attorney files a lawsuit against the mortgagor to establish the default amount and the right to have the collateral (home) sold and the sale proceeds applied towards the outstanding loan. The purpose of the action is to provide evidence of a default and get the court's approval to initiate foreclosure. In connection with the lawsuit, a lis pendens (lawsuit pending notice) is filed with the county clerk or other public property records repository. The lis pendens gives notice to the public that a pending action has been filed against the borrower in default to collect the defaulted debt, including having the collateral (home) sold.

Non-judicial foreclosures are based on deeds of trust that contain a power-of-sale clause. The clause enables the trustee to initiate a foreclosure sale of the collateral (home), without having to file a lawsuit or go to court. The trustee is typically required to issue a notice of default and notify the trustor (borrower) accordingly about the defaulted loan status. If the trustor does not respond, the trustee then initiates the steps for conducting the foreclosure sale of the collateral (home).

Compare state foreclosure procedures and timelines and review foreclosure laws for specific states.

Are you interested in purchasing a foreclosure? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com

Friday, July 15, 2011

How Much Down Payment Is Enough to Buy A Home?

Provided By Realty Times

Most people agree that buying a home without a down payment is a risky decision and soon it might not be an option. As the crippled housing market is beginning to see signs of improvement, lawmakers and key housing industry agencies are debating exactly how much down payment should be required.

Congress and a group of federal regulatory agencies are attempting to create new rules for mortgage lenders in order to avoid a future housing crisis. The loan would be known as "qualified residential mortgages."

The Dodd-Frank law calls for financial reform and the setting of criteria for what would constitute a reasonably safe, basic mortgage. The agencies tasked with this, include the Federal Reserve, the Federal Deposit Insurance Commission, the Department of Housing and Urban Development and the Federal Housing Finance Agency.

The qualified residential mortgages would allow lenders issuing them to sell them to investors. In doing so, the lenders would avoid full risk associated with the possibility of a default on the loan. Other non-qualified residential loans, would be deemed riskier and, therefore, the lender would have to retain 5 percent ownership.

The law is aimed at prompting banks to take ownership and make sure that a borrower truly has the ability to repay a loan. In cases, where a riskier loan is made, and the standard of the qualified residential mortgage is not met, the bank would have to be prepared for a possible default and have set aside extra capital.

A 20 percent down payment is being considered but many are opposed, including banks, real estate agents, and consumer housing advocates. The opposition fears that a 20 percent or 10 percent down payment would price many homeowners out of the mortgage market.

Even if a borrower is creditworthy, coming up with the down payment could be a real stretch. It could take some borrowers more than a decade to save for just a 10 percent down payment.

The Center for Responsible Lending has created charts on its website ResponsibleLending.org to show how borrowers with different occupations would be impacted. According to the chart, it could take a U.S. Army Staff Sergeant, earning a median salary of just over $30,000, nearly 20 years to save for a down payment.

The opposition argues that for the creditworthy borrowers, the loan could cost them more because the lender would raise interest rates on their loans in an effort to cover their extra costs.

Kathleen Day, representing the Center for Responsible Lending, told the New York Times, "We’re not advocating for zero percent down. We think down payments are good. But we think the market should set them, based on the underwriting."

Day says that underwriting (the process of looking at a borrower’s credit history and income and debt levels) should assess risk and determine a borrower’s ability to repay a loan.

Some loans, like those that can be obtained with a small down payment and are insured by the Federal Housing Agency, would be exempt from the qualified mortgage mandates.

For now, the debate continues over if a minimum down payment should be set and, if so, how much. The intense controversy surrounding this matter has prompted the regulatory agencies to extend the public comment period to August 1, 2011.

Have questions about mortgage, lending, or cash offers? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com.

Wednesday, July 13, 2011

Re-negotiating the sale: how and when sales are renegotiated

Provided By Trulia

Standing on your lawn three days ago you shook hands with the buyer. Everyone was smiling and laughing and you thought you had a deal. But now suddenly the buyer wants to re-negotiate the sale. Should you tell the buyer to go fly a kite or is it better to bite your tongue and try to still make a deal happen? As most veteran real estate brokers will tell you - it depends.

Even the simplest real estate transactions involve conditions and contingencies which can cause a buyer to reconsider the purchase of a home. For instance, a buyer may discover easements that allow neighbors to cross the backyard, or a nest of red ants under the front porch. Rather than let the buyer ride off into the sunset, prudent sellers would be wise to at least attempt to re-negotiate the sale. On the other hand, buyers who want to change the terms of the sale as a result of buyer's remorse may need to be shown the door.

To prepare for the times when a sale may be re-negotiated let's examine the key areas buyers will be most concerned with during escrow:

Disclosure statements
Generally buyers will have an opportunity to review and approve a sellers disclosure statement prior to closing as a condition of sale. A disclosure statement is a document that is designed to reveal any material defects known by the seller to the buyer. In many cases these forms will be delivered after the buyer has made an offer but before closing, giving the buyer an opportunity to reject items revealed on the report they weren't previously aware of. To minimize the risk of this occurring, consider delivering the disclosure statement to the buyer before they make an offer.

Preliminary title reports
Once escrow is opened the buyer will receive a copy of the preliminary report. This report will reveal all (or most) of the recorded documents that affect the title to the property. These will likely include easements, licenses, covenants, conditions, restrictions, and outstanding mortgages. If an item jumps up that a buyer wasn't expecting to see, it can be a problem. An example might be an expired access easement, a restriction on the number of vehicles a buyer can park on the property, or an unexpected tax assessment. To avoid surprises, consider requesting a preliminary title report from a local title company before you receive an offer.

Inspection reports
Inspectors are hired by buyers to ensure that the home they are purchasing doesn't have any hidden problems that even the seller may be unaware of at the time of sale. Once received, a negative inspection report can give a buyer a window of opportunity to either withdraw from the sale or attempt to renegotiate the sale. To avoid surprises, many sellers conduct a pre-inspection of the home by a licensed professional. By dealing with any negative issues in advance a savvy homeowner can deliver a "clean" report to the buyer. Be aware though that any issues discovered during a pre-inspection will likely need to be disclosed to a buyer whether you fix the issues or not.

Appraisals
As over 90% of buyers will utilize some type of financing to purchase their next home, it's highly likely that your home sale will involve an appraisal. As appraisers and banks have taken the brunt of criticism for the recent market meltdown, they are much more cautious when assigning fair market value to a home. The result is that an appraisal can often come in lower than both the buyer and seller have agreed to. If this happens, be prepared for the buyer to ask for the price to be adjusted downward to meet the appraisal price. To help avoid low appraisals, many sellers and seller's agents attempt to provide the appraiser with the comparable sales that were used as a basis for the listing price, as well as notes on any improvements that have been done to the home that would not necessarily be obvious.

The question to ask yourself if a buyer is attempting to renegotiate the terms of the sale is - Am I OK with this sale failing? If the answer is no, consider how far you will go to keep the sale together. What will you bend on? What won't you bend on? The best negotiators are those that see the big picture. They know their priorities and are willing to make small concessions to achieve bigger goals.

Do you have questions about selling or buying a home? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com.

Monday, July 11, 2011

Blood Drive a HUGE Success!

Keller Williams/Carter BloodCare Annual Blood Drive last Thursday was a HUGE success!


Last year we had a total of 39 units of blood actually donated...

This year we had an AMAZING 41 UNITS of blood donated!!!

Congratulations for setting a NEW record.

Thank you to everyone for all you did to make it happen!

WAY TO GO KW ROCKWALL!!



-Rockwall Cares

Friday, July 8, 2011

Houses Tell All With BuildFax Report

Provided By Realty Times

If a home could talk, what would it tell you? An Asheville, NC, company is acting as the tell-all for homes across the country. The firm created a database that contains building and permitting information from U.S. cities and counties.

The information is sold to appraisers, inspectors, and banks. Fees range from a single report ($39.99) to report services costing between ($100 to $300 per month). But there's something even better for consumers.

"BuildFax is proud to be able to offer consumers free access to comprehensive permitting reports on their property and on potential purchases," said Holly Tachovsky, president of BuildFax. Tachovsky believes these reports are essential for understanding a home's history. "These reports are an important and highly cost-effective way of learning about a property and we are confident that acquiring this data will become a standard practice for anyone looking into properties details.” Consumer wouldn't think of buying a used car without finding out its history but until now they have purchased homes without knowing the complete history of the home.

The reports from BuildFax are free until July 31, 2011. They provide detailed information about permitted work done on the property, giving potential home buyers and current home owners, in-depth information about the "life story" of the structure.

After July 31, these reports will be available for $39.99 each. Consumers can request free reports at buildfax.com. The BuildFax Reports include comprehensive information that's helpful to buyers and sellers. The company touts that its reports allow consumers to “see within the walls” like never before.

The newly offered free reports (until July 31, 2011) to consumers were previously only available to industry professionals. But exactly how much information will you get? BuildFax says it tracks 60 percent of the country's permit volume which enables it the ability to provide reports on millions of properties all over the country.

The decision to order a report like this is likely influenced by understanding that a home is one of the biggest investments most consumers will ever make. Having a report that helps identify any past or potential issues can help buyers save lots of money that might otherwise go toward unknown repairs. BuildFax is the nation's leading provider of historical building permit data. Now that it's making reports available to consumers, it hopes to help buyers and sellers avoid costly mistakes while also highlighting key upgrades and repairs made to properties.

The report details information on permitted home improvements, renovations made to the structure, additions, roof replacement, plumbing work, electrical modifications, demolitions, and pool work. It gives an account of major construction, major systems such as providing information on the likely age of the roof, plumbing, electrical systems, heating, and air conditioning systems.

It also gives information about past events and documents the building's remodel and repair history. And it provides information about which contractors have worked on the property.

"Consumers don't buy a refrigerator without reading reviews, purchase a car without knowing the full history of a vehicle, or book a vacation without getting more details on their destination," said Tachovsky. "With a home being the most expensive purchase that most consumers will ever make, buyers and sellers should research the history of the property with a BuildFax Report, and our free offer is an easy way to get the details, and peace of mind, risk free." A report like what BuildFax is offering may just offer buyers the peace of mind needed to confidently sign on the dotted line.


If you are interested in purchasing a home, give us a call at 972.772.7000 or email us at frontdesk552@kw.com.

Wednesday, July 6, 2011

Everything you need to know about deeds

Provided By Trulia

For the home buyer, the deed is the heart of the real estate transaction. Your real estate contract will specify the terms of the sale, but it's actually the signed deed that will transfer ownership -- called "title" -- of the home from the home seller to you, the buyer.

This legal document must be in writing and must be signed by the seller, and in many cases, by the buyer too. Your real estate broker and your attorney should be able to help you in drawing up this document.

Often it is necessary to have the document registered with the county recorder's office in the county where the property is located and to be signed in a notary's presence to authenticate the signatures.

There are several types of deeds, but the one that will protect you the most as a buyer is the warranty deed in which the seller promises that he does indeed have title to the property, has a right to sell the property and is transferring it to the buyer.

The seller also promises or warranties that there are no "encumbrances" (something that gives somebody other than the buyer a right to the property, such as liens) or "defects" -- errors or flaws in a deed that may affect transfer of the property. Very similar to the warranty deed is the grant deed.

The riskiest type of deed for a buyer is the "quitclaim" deed, which offers no warranties for the buyer. Make sure you speak with your attorney about the type of deed you'll be receiving and about any cautions, if any, associated with it.

Since the deed is a legal document that's crucial in the legal transfer of a home, it's crucial that you properly review the deed in its entirety before the transfer is completed and the deed is recorded. Among the items you should carefully check in the deed are:

The seller
The deed must correctly identify the seller by name (and sometimes by address). The seller is known as the "grantor" in the deed.

The buyer
As the buyer, you should be the "grantee" specified in the deed. Look to see that your legal name is spelled correctly, and if a street address or post office box for you is given, that it's correct.

The legal description of the property
In the deed, your property will be described according to an accepted survey, which will refer to your property by lot number, section and possibly metes and bounds. The street address for the property may also be noted.

Finally, for a deed to become valid, it must be delivered to and accepted by both the buyer and the seller. Once every detail is properly executed with the deed, you are the rightful owner of your new home!

Have questions about the closing process? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com.

Monday, July 4, 2011

Happy Independence Day!




From our KW family to yours, we wish you a Happy Indepence Day! May you have a fun and safe holiday!

-Keller Williams Rockwall

Friday, July 1, 2011

Top Five Mistakes Sellers Make

Provided By Realty Times

It can be a tough market for selling a home, but those conditions can get even worse if sellers aren't careful. While a seller doesn't control the real estate market, their actions can significantly contribute to how long and how much their home is sold for.

Underestimating Cleaning Up: It may seem obvious, but I can tell you real estate agents everywhere are nodding their heads in agreement as they read this. Inviting potential buyers in to see an unkempt home is like going on a job interview without freshening up after you cleaned your garage. How can the employer notice your fantastic talents and skills if they're hidden underneath a sloppy exterior? How you show your home tells the buyer what type of care you, the seller, has put into it.

If you can't take the time to wipe the grime off the refrigerator doors, tidy up the kids' rooms, take out the messy diapers, put away the food, and take the dogs out of the house for a while, then you'll likely find buyers will quickly move on to the next home on their list.

Lingering During Showings: Yes, we all want to know how the open house or showing went, but hanging around during either of those events is not a good idea. Sellers who tend to linger during showings often make the buyers uncomfortable. Buyers like to have time to explore the home at their own pace and without feeling any pressure. Sometimes buyers want to sit on the porch or out in the backyard as they discuss the home's possibilities. And if buyers are willing to sit for a bit and talk about the home, that's a great sign. However, the chances of them doing that with the seller present is unlikely. Many times buyers will say, "Let's skip the home if the sellers are there." Believe it or not, there are even stories of sellers coming out of the shower–inappropriately dressed–as buyers are coming into the home.

If you're selling your home, do yourself a favor and hit the road for a bit. Take a walk or head to the coffee shop. As soon as the showing is over, you can get all the details from your agent. That's what you're paying your agent for! Let them do their job. Just make sure that your agent has all the home's selling points and any additional features that make this home standout.

For Sale By Owner (FSBO) Trap: Some people are convinced that they can do it on their own. Maybe they can sell their own home, but it likely won't happen without some headaches. Trained specialists are called "experts" for a reason. An expert real estate agent knows the market, has connections, guides you through the process, negotiates on your behalf, and will make the process of selling your home simpler.

One potential land mine that FSBOs face is the flood of people popping in to see their home. It sounds great that there's so much traffic, but the problem is many times the people who pop into FSBO properties aren't actually qualified for a mortgage or may not be serious buyers. Instead they're just looking and satisfying their curiosity at your expense. Agents know to ask the right questions to make certain the lookers are truly potential home buyers.

Not interviewing agents: If you have kids, chances are you interviewed the nanny or babysitter. Taking time to seek out top real estate agents in your area and then setting up interviews with them is equally important. Choosing the wrong agent for the job will be a headache and slow the process down. There must be a connection, understanding, and good communication between the seller and the agent. There are lots of things that go on during the sale of a home, communicating with the agent should be one of the easier tasks.

Pricing a home incorrectly: This could be the worst mistake sellers make. Yet, this is where so much help can be found. Real estate agents see homes every single day. They know the neighborhoods and the comps. They are there to help you understand what homes have sold for in the recent past and what they'll likely sell for during the current market conditions. Get a market evaluation from your agent and understand that what is a fair price for your home in today's market.

If you are ready to sell your home and need a trusted realtor, give us a call at 972.772.7000 or email us at frontdesk552@kw.com.