A Short Sale is simply when a seller has a mortgage balance that is higher than the home is worth.  If the bank agrees to sell the property, then they short sell it and take a loss to stop a bad situation from getting worse.  While Northwest Arkansas is definitely not in the shape that most major cities are in, we do have a lot of property owners that are under water.  If you are one of those people, don’t wait for a bad situation to get worse.  Get it figured out now.  Here’s a good little video explaining short sales.  Please ignore the barking dog at the end of the video .

In Northwest Arkansas, as of mid December 2009, there are some 180 short sale properties listed on our MLS.  This is a fair share of the 7,000 or so properties listed as current so knowing what is going on with short sales can be a great way to get a home for less than current market value.  Give me a shout at (479) 633-7044 if you have questions.

You can also get a list of great deals on distressed properties at NWAforeclosurelist.com.  Thanks for reading/watching.

Today’s market is different than years past… to say the least.  There are still basic principles of buying that you should follow to make smart choices when buying a home as an investment vehicle for your future.  Here are 18 Things to Look for to Pick a High Appreciating Neighborhood…

Neighborhoods generally appreciate because of…

1. Great schools or proximity to schools
2. Pride of ownership
3. History of high-appreciation
4. Low crime rates
5. Economic stability
6. Employment access and availability
7. Homogeneity, cohesiveness
8. well maintained, curving streets
9. Rivers, mountains, hills, streams, lakes, oceans, or any body of water nearby
10. Plenty of common area
11. Parks and green areas
12. Mature trees or abundance of trees
13. Properly lit streets
14. Historical significance (think of downtown areas)
15. Trendy stores, nearby cultural centers (like performing arts, galleries, etc)
16. Good infrastructure, roads, fire, police, etc.
17. Low traffic congestion
18. Parking

These things, along with a number of other factors, will help you find a neighborhood that will appreciate during your time living there.  Many of these factors are hard to determine without the help of a professional.  Give me a call if you are considering a certain neighborhood in Northwest Arkansas and I will be happy to do a neighborhood appreciation analysis for you.

I think this video sums up my thoughts fairly nicely.  If you’d like to read some great material you can visit 1000wattconsulting.com for lots of commentary on real estate, brokerage, and more.  Remember, you are not a lead…

If you want to work with someone who doesn’t look at you as just a ‘lead,’ contact me.

Getting a loan these days is a bit harder than it has been in years past.  Lenders are now subject to much more regulation so they are quite a bit more careful in the way they do business.  Here are 8 Items Homeowners Need to get a Loan Approval in No Time Flat…

1.  Two months’ most recent mortgage statements (if applicable)

Lenders want to see what you are paying currently.

2.  Two months’ checking account statements (all borrowers if separate)

Lenders will look at how much is going in and out of your accounts as well as what kind of balance you keep in each account.

3.  Two months’ savings account statements

These help the lender determine your level of savings.

4.  Two months’ other investment or asset account statements

If you have other investment or asset account, these will raise your borrowing power and possibly lower your interest rate.

5.  Last two  paycheck stubs (all borrowers)

Your pay stubs are a 3rd party record of your income.  They verify what you have told the lender.

6.  Last two years’ tax returns

This will show your income over the past couple of years and help lenders determine your reliability.

7.  Hardship letter (if applicable)

This outlines any credit issues, payments or situations the borrower is in.  This is really only needed in the case of a loan modification.

8.  Financial worksheet of assets and liabilities

It’s good to have your finances mapped out.  Also know your monthly expenses other than the biggies, like groceries, savings, luxury items, etc.

If you have your ducks in a row with all these documents…. getting a loan should be no problem.  If you need some help or advice compiling this list of documents to get your home loan, please contact me for more information.  I can give you a list of very reputable lenders that will do everything in their power to see that your dream of home ownership is realized.

I think it’s safe to say that buyers seem to be looking for a ‘deal’ these days.  Whatever that means.  Here are a few ways to make sure you purchase a ‘deal’ from Barbara Corcoran with my own bit of frivolous commentary thrown in…

A lot of this advice brings to mind a couple of points…

• You’re doing yourself a disservice if you don’t have representation, on either side.
• If you aren’t in a hurry and want the best price for your home… keep it up!
• If you are looking for a deal, look for a deal…
  • contact local real estate companies and banks to get their foreclosure lists.
  • Search for homes with a low price per square foot compared to comparable properties

Realtors can help you with that.  Contact me and my team today to see what the best deals are in Northwest Arkansas right now.

Below is a sampling of mortgage rates from several local lenders in Northwest Arkansas.  I’ll be posting these rates (sometimes with different lenders) every Friday so keep coming back if you are shopping for rates or are interested in rate trends.  Of course, rates and APR are based on borrowers with high credit scores and 20% down payment.  If you would like a full list of all lenders in Northwest Arkansas you should email info@mortgagedatareport.com and request that NWA be added to their daily list.

Mortgage Rates for October 23rd, 2009

This weeks rates come from two local lenders, Arvest and Meridian Mortgage, who graciously provide their rates anytime.  The third set of rates is provided from Wells Fargo online rate sheet… which you can find here if you are looking for other types of loans.  Arvest’s rates for today are based on a 50 day lock.

I hope you find these rates helpful.  Here is the contact information for all the lenders listed this week.

Arvest – Kirk Johnson – (479) 271-1446 Sugar Creek Branch

Meridian Mortgage – Kelly – (479) 582-LEND

Wells Fargo – (479) 636-2245 x13

Disclaimer:

No warranty is made as to the accuracy of the information provided herein. All conventional rates are quoted based on a 740 FICO score with 20% down payment, 30 day lock unless noted, and a purchase amount of $200,000. FHA rates are quoted based on a 740 FICO score with 3.5% down and a purchase amount of $200,000. Lender rates will change depending on the borrowers actual down payment, credit score, and market volatility. Contact the lender directly for the most current rates.

On average 40% of home buyers every year are first-timers.  That’s hundreds of thousands of buyers that have no clue what title insurance is, why they need it, or why they should even care.  Let’s get a definitive answer as to what is title insurance shall we?  Then, all you first-timers (and most of the rest of us home owners) can rest easy knowing what the heck this is and why you need it.

Ask a Title Company, not a Realtor

Before you say anything, touche’, I am a Realtor explaining title insurance… but in my defense, I’ve learned what it is from qualified closing agents within reputable title companies.  My point is this, when you hire a Realtor, let them explain agency to you but let a Title company explain a title policy and title insurance.  Let it ‘come for the horses mouth’ so to speak.

What is Title Insurance?

The definition of title insurance is this:

Indemnity insurance against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens.

Title insurance arose out of a deficiency in land records laws.  Basically, poor records have been kept, and poor systems have been in place over the years that allowed for previous owners and lienholders to capitalize on a transfer of ownership.  Title insurance protects (for the most part) the owner from things that a title search or abstract may miss.

Note:  Most institutional lenders require a title insurance policy to protect their interest and allow a mortgage on the property.

Types of Policies

Owner’s Policy

An owner’s policy insures that the title is vested in the purchaser and that it is free from defects, liens and encumbrances.  Unfortunately, like most insurance policies, title policies come with exceptions.  This means that you should read your policy carefully to determine what types of liens, encumbrances, and defects may NOT be covered by the policy.  There are some newer policies available that companies call “enhanced title policies” which have less exceptions.  These generally cost about 10% more than traditional policies.  While it may be customary for a certain party to pay for the title policy… it is negotiable.

Lender’s Policy or Loan Policy

This is issued only to mortgage lenders.  It usually follows the assignment of the mortgage loan so it benefits the purchaser of the loan if it’s sold.  This helps to facilitate the sale of mortgages on the secondary market.

What’s It Cost?

Most states regulate the price of title insurance premiums.  My experience has been in Arkansas so I will tell you what our policies cost but I recommend calling a local title or closing company directly if you want to know.

In Arkansas, if one title company handles the closing then you can save money by purchasing a combo title policy.  You can also save a good deal of money if the seller can bring the previous policy to closing.  Here are some example prices:

• $50,000 policy     =  $350
• $100,000 policy  =  $560
• $200,000 policy  =  $805
• $300,000 policy  =  $990
• and so on…

What are my rights?

RESPA (The real estate settlement procedures act) entitles homeowners to choose their title insurance company when making a purchase or refinancing residential property.  Typically, homeowner leave it up to a bank or attorney but they do have the choice.  Commercial real estate transactions are not within the scope of RESPA so they are the exception to the rule.

If you have further questions about what title insurance is, what it covers, and exactly how much it will set you back you need to contact a title professional who can tell you the specifics.  If you need a short list of reputable and friendly title professionals, contact me, and I will email you some local closing agents’ information.

There are times in our lives that are just bound to be stressful.  The first day of school, your wedding day, the birth of your children… etc.  One of those days is the day you close on your new home.  Here’s 7 Things You Never Want to Hear from Your Closing Agent when you are signing your life away (kidding… I’m kidding, sort of.)

Cue Drum Roll…

7.  “Hmmm… I wonder what this piece of paper is for?”

6.  “Whew!  We laid it down last night!  I just got up an hour ago and I’m still see’in double!”

5.  *Chuckle* “Yeah, I know this house…”

4.  “Okay, now here’s the Stigmatized Home Waiver.”

3.  “We don’t usually do this but…”

2.  “Now where are those loan documents?”

…and the #1 thing you never want to hear from your closing agent is:

1.  “Let’s hurry this up, I got a plane to catch…”

After writing this fun little post… I’m thinking I’m going to write one for appraisers, real estate agents, lenders, and anyone else I can think of in the real estate industry.  Got any suggestions?  I’d also love to hear some “real life” examples of things you wish you hadn’t heard in the real estate industry…

Home Inspection is an important part of the Escrow Process when purchasing a home.  Most Realtors will give you a list of a few different inspectors with their favorites on the top.  Here’s EXIT Pro Realty’s version of ‘the home inspector list”  for Northwest Arkansas that you would get from one of our agents.  Read below and see why each of these competent and trustworthy inspectors is recommended… then you can make an informed decision when you purchase your next home.

Home Inspectors Worth Their Salt

Don Seba – Home Inspection Professionals

Since I’m the one writing this article, I can put my recommendation on top.  Don Seba does some great work.  He’s thorough and honest.  He puts together a great inspection report with pictures of all the issues and suggestions for fixing them.  He even fixes minor problems as a courtesy and has a section that shows you where important features of your home are located… like the water shutoff, the electrical box, pilot lights, etc.  He’s a great inspector and I would highly recommend him to anyone looking to get a good home inspection.  Don’s number is (479) 855-5777.

Roger Buckley – Ozark Plateau Property Inspections

Karen Brooks, one of our administrators recommends Roger as a great inspector.  She has used him many, many times and he does a great job.  I have used Roger on several inspections as well and always find him knowledgeable, friendly, and courteous.  Reach Roger by calling him at (479) 633-0046 or emailing him at oppinspect1@sbcglobal.net.

Tom Bartlett – A-Z Inspections

Debbie Ransweiler, one of the newest members of EXIT Pro says:

I recommend Tom Bartlett with A-Z Inspections.  He is very thorough, trustworthy and efficient. He e-mails the report, or hand delivers it, usually the same day, that is so complete, even explaining future recommendations and concerns. I’ve never had an unhappy client.

You can reach Tom at (479)466-1959.

David Linn – Covenant Property Evaluations

Mel Reed, our Principal Broker and Trainer, has this to say about David:

David has performed every home inspection with extreme professionalism. He performs an in-depth inspection and is very reasonable in his fees.  David uses the latest technology in the Palm-Tech Inspector which will generate a very helpful report.

You can reach David by calling (479)957-3056.

If you need advice on any professional real estate services… appraisers, painters, carpenters, property managers, lawyers, title companies, insurance agencies, etc.  Please, don’t hesitate to contact me.

While our area has been fortunate enough not to see the extreme level of foreclosures, short sales, and distressed properties as some other areas of the country, we still have our fair share.  It seems everyone is out for a bargain and that’s never more true than when you take on a short sale.  Here’s the skinny on what you need to know about short-sale purchases in Northwest Arkansas…

What is a Short Sale?

If the home is being sold for less than the seller currently owes on the property – and the seller does not have the money to make up the difference at closing – that is considered a short sale.  Because of the recent drop in home values, the economy, and a number of other factors, homeowners are finding that they owe more on a home than they can realistically get by selling it themselves.  Therefore, they must get the bank or mortgage company (the holder of the lien on the home) to agree to sell the house for less than is owned on the mortgage.

A Short Sale is NOT a foreclosure.  A foreclosure is when the seller’s lender takes title of the home and sells it directly or through an asset management company.  Sellers attempting to stave off foreclosure often try a short sale as a better alternative, keeping their credit intact.

Short Sales are not for the Faint of Heart

Signs you’re a good match for a short sale purchase:

• Patience – Short sales can take anywhere between 45 days up to 6 months and longer to close.  The more tied up the property is in additional debt or mortgages, the longer it will take.  Make sure you’re time frame (and your nerve) is flexible enough to deal with a short sale.
• Financing – Cash talks when you’re talking short sales.  This is why so many investors have gotten into the short sale game… they have the money to make good offers and back them up with a quick sale (if you’re lucky enough for that).  If you don’t have cash, make sure to be well-qualified through a lender and you’ll be ahead of the pack.
• No Contingencies – Having a home to sell before you close?  A short sale may not be for you.  Tight time frame?  Again, don’t try to buy a short sale… you’ll get burned.

Surround Yourself with Knowledgeable Experts

There are a few people you’ll need to get to know if you want to be successful in buying a short sale…

• Real Estate Attorney – Very few short sales are actually lender approved.  That’s why you need a good real estate attorney covering all the bases to increase your chances of getting an approved contract.  You’ll also need one if you have special needs, concessions, or language that needs to be written into the contract as your real estate agent cannot legally modify contracts, only fill in the blanks of approved contracts.
• A Real Estate Professional – Maybe you have a go-to agent that you use.  Maybe you don’t.  Either way, make sure the agent you use knows how to deal with and handle short sales.  They are very different animals than traditional real estate and an agent that is experienced in the short sale process is worth their weight in gold.
• Title Company/Closing Agent – Title Officers can do initial title searches of short sale properties to see liens attached to the property.  Beware of short sale candidates with multiple leins.  These are extremely difficult to get a contract to closing.  Any or all of the lien-holders could put a kind or a stop to the process.  If you don’t have one you trust, ask your attorney or real estate professional.

Short Sale!?  Why isn’t it called Long Sale?

Just to reemphasize this point… short sales can take time… lots of it.  If you don’t have the time, nerve, and determination to wait, a short sale isn’t for you.  Here are just a few other factors to consider…

• Rejection – Lenders can’t give home away.  They’d go out of business.  So, they try to limit their losses.  If you go in and low ball an offer on a short sale by 20%-30% don’t be surprised by a quick response… NO.
• Crappy Terms – Even with an accepted contract, a seller or lender can back out of the contract with no repercussions.  If either party wants to change or doesn’t like the terms… there really isn’t much you can do about it.
• Don’t Expect Repairs – You can ask for them but don’t expect them.  These properties say “as is, where is” in the MLS for a reason.  Banks are already losing money, don’t expect them to shell out more for repairs, especially with a low priced offer.

I hope you enjoyed the short sale rundown.  I know the process looks pretty bleak but there is definitely a great deal to be had if you have the will to see it through.  Contact us if you feel up to the challenge and we’ll be glad to start searching for your next short sale as a primary residence or investment property.  Get started on your own search now by visiting our online home search.