Know Before You Owe

knowbeforeyouowe

The holidays are over, the sun is finally peaking out, and the buyers are making their grand debut from dormancy.

But as a buyer, knowledge is power. And The Consumer Financial Protection Bureau knows that. They have worked diligently to make the loan process more transparent. The new forms discussed below (the Loan Estimate and Closing Disclosure) were introduced to present less confusing information as to ensure consumers understand the terms of their loan and the fees they’re paying. Know before you owe!

To walk the walk, you have to talk the talk. Here is the new lingo and the new forms.

Let’s talk Terminology:

A lender is now a “Creditor”

The Good Faith Estimate (GFE) is now the “Loan Estimate” or LE for short.

HUD or Settlement Statement is now your “Closing Disclosure” or CD for short.

The GFE was meant to provide the buyer with a really good idea of what they’d be bringing to closing and the terms of their loan. But the rules behind its successor, the LE, are stricter, and provide a higher financial accuracy to the buyer. It includes interest rate, fees for both creditor and third-party services (ie: appraisals, title insurance, closing costs, etc.)

Before you do anything, shop around for a lender and get prequalified for a loan. There’s little advantage to visiting with a Real Estate Agent until you know what you can afford.

First you get prequalified, then you work with a Realtor who finds you the perfect home, and then comes your Loan Estimate.

SIX ELEMENTS TO GET THE LOAN ESTIMATE

  1. The consumer’s name
  2. The consumer’s income
  3. The consumer’s SSN to obtain a credit report (creditor shopping will NOT affect credit rating)
  4. Property address
  5. An estimate of the value of the property
  6. The mortgage loan amount sought

CLARIFY!

The prequal is NOT a Loan Estimate. If the consumer/buyer requests a preapproval or prequalification, and provides 5 of these 6 elements in their application, the creditor will provide the prequalification, but is not yet obligated to provide the LE.

Only when the consumer provides all six elements of the application, the creditor must get the LE to the consumer within 3 Federal Business days (if the creditor is open on Saturday, then Saturday counts). Once provided, the LE holds true for 10 days once a property has been determined.

The home does not actually have to be under contract at this point, but it greatly benefits the buyer if it is. Without knowing which title company the contract will be at, your creditor can’t know the exact fees. With the new LE, the liability and financial accuracy weighs much heavier on the creditor than it did in the past. So what if there are differences presented on your final CD than those on your LE?  There are zero tolerance fees, and fees that fall between a 10% tolerance. So if there is a difference between your CD and your LE, depending on which category the miscalculation falls under, the creditor may have to pay.

Moral is, sellers want strong buyers. Preapproval from a creditor shows just that, which is why it’s critical to get that first. Present that to your Realtor, house hunt, get under contract, and request the LE. Leave the rest to your happy and knowledgeable Realtor.

We’ll leave the changes to the consummation (the new term for closing) for a later discussion…

QUICK FACTS FROM 2015 COMPARED TO 2014

Demand was healthy in 2015, and the supply was enough to give the buyers options.

  • 1% increase in new listings since 2014
  • 7% increase in median sales price in 78418
  • -4.2% decrease in days on market
  • 15% new construction market share in 78418
  • 8% list to sale price ratio in 78418

The Art of Negotiating

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Whether you’re trying to get the best price at the flea market, ask for a higher salary, or buy a new car, having good negotiating skills is important. Luckily, during a real estate transaction, you have a hired professional to do the tough stuff for you! Whether you are buying or selling, your agent should be representing your needs and wants through this fine art of negotiating.

Some may believe that negotiations are “all or nothing.” That one party wins over the other. This could not be further from the truth. While the goal of negotiation is most certainly getting what you want, the fact is that the best deals incorporate terms from both sides.

First, think about what you want to achieve from the process. Make a list of what you want from the negotiation and why. This helps determine what would cause you to walk away so you can build your strategy within acceptable terms. Try, also, to understand what your counterpart’s motivations are as this is equally as important. By studying the other side’s goals, it may help you frame your own by realizing that there’s a solution for you both. The single most important tool you and your agent have is preparedness. Communicating with each other the main goals and why they’re the goals gives your agent the best negotiating power there is. Follow these steps:

1.      Establish a fair sales price. Your agent should run a comparative market analysis (CMA) for you to assess what a fair asking price is based on other sales in the area.

2.      Establish what you can afford. If you’re buying, your agent should be able to help you with this a bit, and if you’re working with a lender they will be invaluable here. If you’re selling, what is your bottom line?

3.      Decide what other things would be a deal breaker. Price is typically the most important factor. However, it may also be a deal breaker if you’re selling and you cannot afford to pay the buyer’s closing costs at their request, or you’re the buyer and your insurance requires a windstorm certificate that the home doesn’t have.

4.      As a buyer, when it comes to inspections, negotiating repairs can become just as important as presenting the offer itself. If the home you’re seeking isn’t advertised as being sold “As Is” then you likely have some negotiating powers when it comes to repairs.

5.      Try not to get emotional. This is a tough one as a home is personal. And if you get too emotional, you may make an exception to your goals. But your agent is there to represent you, your goals and to make it about business so this doesn’t happen.

From there, your licensed Real Estate Agent should be able to clearly communicate your desires.  It’s your agent’s job to ensure you are represented correctly, fairly, and your voice is heard! It’s all about collaborating to meet both ends, making it a “win/win” situation.

What should you look for in an agent? These characteristics may be beneficial: An active listener, someone with a reputation of getting along with others, someone with a mild-mannered and optimistic personality, and a clear but firm communicator.

So sit back, and let US work for YOU. If you’re feeling like your agent is trying too hard to convince you to forgo your main goals, then perhaps it’s not the right fit. There’s a solution to every problem. Think outside the box, discuss rather than argue, and don’t forget, it never hurts to ASK!

8 Benefits of Buying a House at Year’s End

endofyearrealtorSummer may be real estate’s busy season, but winter offers great opportunities for buying a house, especially for renters looking to become homeowners, growing families trading up to larger houses and baby boomers seeking homes to fit their evolving lifestyles.

Generally speaking, your housing choices during the late fall are still healthy. October and November are great months to go house hunting. December is usually sparse, market-wise, but if that fits your timeline, you could luck out.

The benefits to buying a house at the end of the year include the following:

1. Tax savings

If you close by December 31, you can deduct mortgage interest, property taxes, points on your loan and interest costs. These deductions are significant, especially in the early years of your loan when you’re paying off a lot of interest.

2. Motivated sellers

Many sellers want to enjoy tax savings on the next home they purchase. They may accept lower bids in order to meet Uncle Sam’s deadlines. However, if you’re in a strong seller’s market, you’ll want to be conservative and heed advice from your real estate professional.

3. Builder incentives

If you’re buying a house that is brand new, there’s a good chance builders may push to close the books on their year—and meet quotas. They may offer upgrades or little extras to sell houses before the calendar turns.

4. Available movers

Many moving companies are booked six weeks or more in advance during the busy summer months. In the fall and winter, it’s normally easier to secure the services of a moving company or rental equipment on shorter notice.

5. Paying toward something you own

If you’re renting, your monthly check goes toward something that will last you a month: You’ll never see any return on that money. When you buy a house, your monthly mortgage payment goes toward an investment—and ultimately a roof that’s yours.

6. Consistent payments

Landlords can increase your rent. Once you secure a mortgage, you can rely on consistent payments if you have a fixed-rate loan.

7. Freedom to renovate

Modernize your kitchen, paint your home’s exterior neon orange, change your fixtures orreplace your carpeting; whatever inspires you, no one can tell you, “No!”

8. Gaining equity

In the beginning, most of your payment goes toward interest. But gradually more will go toward paying off your principal, meaning you build up equity—or savings—in your home. Another factor in equity is appreciation: As home values rise, so does your rate of equity.

via Realtor.com

Next Stop for Median Home Prices $200,000

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CORPUS CHRISTI – The cost of an average home in Corpus Christi will exceed $200,000 before the end of the year, economic and housing industry experts say.

The average single-family home in the city fetched $199,300 in July, according to the most updated figures provided by the Real Estate Center at Texas A&M University.

Jim Lee doesn’t expect the price tag to stay there.

In fact, it’ll likely inch further up before Christmas, he said.

“We’ve been seeing appreciation for months, but ($200,000) is a benchmark we’re going to hit soon,” said Lee, the chief economist at Texas A&M University-Corpus Christi. “This is a head up for next year’s tax bill. It’s going to go up.”

He credited the upswing to a fierce surge in demand for homes, which he attributed to growth from the Eagle Ford Shale energy play.

The average price for a home in Corpus Christi spiked to a record $202,700 in May, but dropped to $197,000 the next month, according to the most updated figures provided by the Real Estate Center at Texas A&M University. It was at $199,300 in July. Lee said prices could climb as much as 10 percent by the end of the year. And that likely will mean property taxes also will increase.

“As (home) prices go up, so too do the taxes,” Lee said. “Another 10 percent … will be a burden on homeowners. They need to be ready for it.”

In an interview Wednesday with the Caller-Times, Lee described today’s housing landscape is somewhat reminiscent of the 2004-05 home-buying market, which ended in a downturn. The difference then was the Corpus Christi housing market more closely followed the national housing trend, and was not being guided by a fertile-and-booming oil market.

Scores more residents have descended on Corpus Christi in the past two years, lured by the prospect of energy-related jobs and a cost-of-living cheaper than anything in the metropolitan areas. Economists believe as many as 10,000 jobs will spring from it during the next five to seven years.

Statewide, 81,000 single-family homes were sold in Texas in the second quarter of 2014, according to the Texas Quarterly Housing Report, issued by the Texas Association of Realtors. That represents a 1.1 percent increase from the same quarter of 2013.

A total of 2,728 homes in Corpus Christi were sold between January and July, according to the Real Estate Center, which estimated average home prices would hit $194,100 this year.

Homes also are staying on the market half the time they did three years ago. Corpus Christi’s home inventory in July was such that a home will remain on the market for 4.8 months, compared with 10 months in July 2011.

Warren Andrich, president/CEO of the Corpus Christi Association of Realtors, expected more people to take advantage of first-time homebuyers assistance programs in the coming year, even for homes below $200,000. Andrich said the market may be advantageous to homeowners looking to upgrade, but may also present greater challenges for lower- and middle-income homebuyers, who are finding it increasingly hard to purchase.

There are 1,800 to 1,900 houses available in the city, compared with 7,300 homes on the market three years ago. Homes that are considered affordable — because they are listed for a selling price between $125,000 and $160,000 — are scarce in Corpus Christi; there are roughly 200 of them available.

Lee said homeowners had to do a lot of soul searching during the 2004-05 housing downturn. At issue was whether to dump their homes ahead of what would become a major national housing crisis and a global economic recession.

His advice for those tempted to sell while the price tag climbs?

“It’s definitely a seller’s market. Definitely,” Lee said. “But if you sell, where are you going to go? No one knows how long the oil boom will last.”

via Caller Times

THE TRUTH ABOUT FORECLOSURE AUCTIONS

foreclosures

Foreclosures: There’s something about them that makes ears perk up. A “good deal” is hard to ignore…but what are the foreclosure auctions all about? Here are some tips and tricks if you ever find yourself with a paddle in your hand, bidding on your very own foreclosure.

1. Bring the funds with you. This must be in the form of cash or a cashier’s check

No personal checks, pre-approval letter, or your mom’s famous coffee cake. These simply won’t cut it.

Because you pay directly on the spot upon winning, you don’t want to overpay as it will take approximately 30 days to get that refund. Instead, if you’re coming with a cashier’s check, come with multiple denominations so that you can add them together to create the appropriate amount. Also, have them made out to you so you can deposit the left over checks back into your bank account. If you win, you simply sign them over.

If, however, you are in an auction online, you have a bit longer to come up with the funds.

*Some companies charge a percentage of the final sales price as a buyer’s fee. Be sure to ask about this, or read the fine print.

2. Do your research: Foreclosures are sold “AS IS, WHERE IS, NO PROMISE OF ANYTHING.”

There is no guarantee of a clear title, functioning plumbing, electrical, structural issues, etc. You must do your due diligence to make sure you know what you may be purchasing. Liens on properties are public record and can be found online or at the local courthouse.

3. Opening bid does not necessarily mean you can get the property at that price.

This number is normally set by the foreclosing lender, and is usually the estimated loan amount owed to the lender. Sometimes, the opening bid is simply an estimated minimum by law that includes only taxes delinquent on the date of judgment, or a number that the creditor believes will spark interest. This minimum bid can be just a tool to get the bidding ball rolling  – but if the bids do not reach the creditors bottom line, then the property will not sell and will go back to the creditor to do with it what they choose.

4. Purchasing an occupied foreclosure.

If the homeowner does not vacate the property after the foreclosure sale, you as the new owner, must give them a formal notice to move out. If they do not, you have the right to bring on an eviction lawsuit. If the person occupying the property is a tenant of the former owner, a different form of action must be taken. There are certain laws that actually protect these types of tenants. It all comes back to doing your research before you purchase so you know what you’re getting yourself into.

5. If you’re the one bidding, you’re the one buying.

There is an exception: By signing a Power of Attorney, you may appoint a representative to bid for you. Sometimes, auction companies may offer live remote bidding by telephone through an auction representative or has live Internet bidding capabilities. There are options if you are unable to attend an auction.

6. If the auction begins at 10, be there before 10., the first Tuesday of every month, at the county courthouse.

Auctions in Texas are the first Tuesday of every month, on the south side of the County Courthouse. The auction may only last 10 minutes total, so be timely, or you may miss the whole thing!

With that said, Texas law requires a three hour window from the time given on the auction notice and when the auction actually happens.

 

If Corpus Christi foreclosures are something that interest you, final words of advice would be: Save your money, do your research, and don’t be late! Happy bidding!

Corpus Christi Real Estate Market Rebounds Since 2007 Slump!

CORPUS CHRISTI REAL ESTATE PRICES

Gains in existing home sales and median prices during the past three months have lifted the Coastal Bend’s housing market to its highest levels since the local housing slump began in 2007.
Sales closed between April and June numbered 1,172 units, or about a 19 percent increase compared to the same time in 2011, according to figures from the Corpus Christi Association of Realtors.

The median sales price also has risen by more than 8 percent compared with 2011 to $145,367, figures show.

Housing inventory — measured as the amount of time it would take to sell all available existing homes — has dropped almost by half to 5.6 months in June compared with 10 months in June 2011.

There was a monthly average of about 2,200 homes for resale on the area’s housing market during the period, figures show.

The increased buying activity spans all price ranges, said Char Atnip, a residential Realtor and chairman of the realtors association board.

SEARCH THE MULTIPLE LISTING SERVICE IN REAL TIME >>>CLICK HERE

“There’s a lot more people who are looking simply because interest rates are so low and prices have not skyrocketed, and it’s a great time to buy a home,” Atnip said.

New home construction activity has also increased compared to 2011.

In Corpus Christi, data from the city’s Development Services department shows there have been 449 permits issued this year for new residential construction through June, up 61 percent from the first six months of 2011.

The permits have an associated project cost of more than $82 million, figures show.

All but one of those permits is for single-family homes, with one being issued for an eight-unit building.

In all of 2011, the city logged 660 new construction permits for projects totaling more than $118 million

The local figures are similar to momentum building in many areas of the country, with builders beginning to respond to growing buyer interest.

U.S. builders broke ground on the most homes in nearly four years in June, The Associated Press reported this week.

MARKET OUTLOOK

The housing inventory of less than six months is approaching the five-month mark, which is what the area experienced during the housing boom between 2004 and 2006, said Jim Lee, economics professor at Texas A&M University-Corpus Christi.

A normal inventory for the Corpus Christi market is about seven months.

Low inventories typically trigger increased prices as supply dips and demand increases.

Home building can also increase, which is good for local economies, because it generates activity that isn’t exported to other areas, Lee said.

During the area’s most recent housing boom period, construction outpaced the area’s growth rate, which contributed to the slump, Lee said.

Source: Corpus Christi Association of Realtors via Caller Times. Read the original at housing market or housing or home sales, – Google News.

OFFICIAL COUNT OF NEW PROPERTIES UNDER CONSTRUCTION

New Home UPDATE as of 7/19/2012:  As of this week there are a good number of new homes under construction going up here on North Padre Island!  New Developments relating to Schlitterbahn and the Proposed New Park Rd 22 Bridge are creating such an exciting atmosphere to be in. It’s been nearly 5 years since we have seen new construction like this!!

New Construction count is as following:

WATERFRONT HOMES – 8

WATERACCESS HOMES – 55

MULTI-FAMILY PROPERTIES – 2

Dry lots are selling selling on the Island. 18 have closed since June 1, 2012: Selling between $18,500 – $28,900

Padre Island’s real estate market is recovering and now bringing a new wave of buyers.

Now’s the time. Don’t Wait to Buy, Buy and Wait!!

Let Coastline Properties show you the BEST the Island has to offer – put our expertise and experience to work for you!!

Check us out!   Cheri Sperling, Coastline Properties