AmyBSells Team - Cincinnati Real Estate Blog

Amy March 25th, 2008

This morning, I was up with the birds, hoping that spring will find its way too cold and confused Cincinnati Weather. We need spring here to make our lawns and trees green, so our Real Estate can look beautiful for our promising spring market.
I was reading Real Trends Newsletter online today and thought I would share the whole article with you, along with some points I thought you might find interesting. I also wanted to point out some points that I have been sharing with you all along, since the market became not so easy to work in. As you all know, I am a realist, and a very painfully honest Real Estate Advisor. I like to try to find the positive in every situation, and we still have some reasons to be positive in this market. Let me share with you some thoughts….
This March edition of Real Trends newsletter that is attached suggested that this year, for the first time ever, the number of Realtors and associated Real Estate Professionals (Lenders, Appraisers etc) have declined. Only the Strong Survive! This has proven true in the Cincinnati market as well, as membership in the Cincinnati Area Board of Realtors dropped when our annual fees were due in January.
Interesting as well that 50% of all listings in the country are held by the nation’s top firms, listed in the article. I believe this is a true testament to BRANDING the large companies, and the internet reach of so many large Real Estate Companies. As you may recall, Remax is an international Real Estate Name, in over 60 countries on Earth! Easy exposure for your home in any part of the world. In fact, recent data shows that Remax is only behind Realtor.com and Homegain.com with the largest internet market share in the US, Based on NAR statistics.

Real Estate Auctions have become more widely used in this current market. States that were hit hard with the market value decline like Florida and California, report the use of Auctions to sell real estate up 46% from 2003-2007. Interestingly enough, the foreclosure properties are not successful at auction sales, as they report that banks are not able to take low bids or the types of hits that auctions often result in)

FORECLOSURE UPDATE:

VERY IMPORTANT INFO ON page 5 of this newsletter if you want to invest in a foreclosure! This will be another article on my blog entirely. This section of the newsletter warns of the same issues that I have previously discussed in my articles on Foreclosure and the hidden costs and the slow banks response times. The bottom line on Foreclosures, they are not good if you are looking to buy your first home, to move your family in the home, if you are looking for a good experience with ease when you purchase, or if you need a loan to purchase, if you do not have cash on hand for unforeseen emergencies. Foreclosures are still best for those that have SUPER PATIENCE, do not need to buy, and have cash, mostly investors.

Real Trends compiled a chart of all the major data sources in US Real Estate, which all 8 sources showed a decline in year over year change in the national price index, ranging from -0.3 to -10.9%.
In the markets in the US that are selling homes, they found that those selling are priced BELOW $250,000, and are “cleaned up.” Contributing to my 2008 motto: We are in a PRICE WAR and a BEAUTY CONTEST with home sales in Cincinnati.

Further, in all of the major markets, only 4% of the inventory is on the market for less than 4 months. 95% of inventory is on the market for 4-12+ months, and over half of those 95% are on the market 9-12+ months. The silver lining and positive spin on this data, is that in Cincinnati, we experience the same issues, but certain areas of the city are on the market far less than 9-12+ months! Areas like Hyde Park, Mt. Lookout and Oakley have a high demand, a good portion of housing at or below $250,000 and are experiencing about a 95-97% list to sale ratio in today’s market. In my own business, my average days on market are between 45-25 depending on the part of town, and my overall list to sale is 97%. I know that my experience and success pricing homes for the current market has directly contributed to my rapid sales and high ratios. I contribute this to experience, realistic sellers, and .
I have to agree with a statement that Forbes magazine wrote recently, that was quoted in this Real Trends Newsletter, and I will increase the size and change the font for good measure,
Greed and Impatience are the top 2 factors contributing to our current market conditions today.
Another interesting set of data regarding negative equity in homes in the US. The longer you own your home (5 years being ideal, the longer the better in this market) the more equity you have. The data was collected from 72 million owner occupied homes, suggests that
30% of homes purchased in the last 12 months have negative equity
39% of homes purchased in the last 24 months have negative equity
LESS THAN 2% of homes purchased in the last 5 years have negative equity.

What does this mean to the homeowner? Stay in that house as long as you can, especially if you have a 100% or an FHA loan with little or no down payment. You will need every bit of equity you can get! I hope that my clients recognize that I want to help them sell their homes for a gain, not a loss. The longer you own your home, the more gain we can find you, the shorter, the more likely it is that you will need to make up for the loss at the closing table. The AmyBSells Team can sell a home in any market, we prefer to help you make money, and curb any losses. In the end, we price the house for the market, not the equity position.

THE POSITIVE

The report suggests that there will be more new households created in the next 10 years, than there were in the last 10 years.
Congress has done some good things for the housing market: They increased FHA loan limits, which have helped a number of my clients, they have passed laws to deter some foreclosure increases, which helps area property values not decline, and they are creating a number of Real Estate associated Tax Credits, which encourage buyers to purchase real estate.

CONCLUSION

As a Certified Residential Specialist, selling more than 32 homes a year in a down market, REAL ESTATE IS SELLING. I tell my sellers, if you have to sell, we will get it SOLD for you, but now is not the time to have unrealistic expectations. I did not cause the market conditions, and I cannot cure it, but we must make the best of the situation. There are proven ways that my team has found to position your home for a solid SALE in a realistic time frame. Call us to help you position your home for a successful sale! We have proven results in this challenging market!

• Buyers , Financing , Foreclosures , Housing Market , Lending , Pricing , Value
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Amy February 6th, 2008

First Time Buyer or Investment for College or Retirement, the time is NOW!

Wells Fargo, dedicated to servicing it customers above all else, stands tall in this difficult Real Estate market. They recently sent out their “Year in Review” (click here) discussing market and loan conditions last year and what to expect for this year. As the article suggests, supply and demand are still causing a “correction period” in our market. With so many mortgage brokers in the US, Wells Fargo is standing tall amidst so many lenders who did not make it through the storm.

Rates are all over the news these days, and Wells addresses this as well. Interesting to know, that just 8 years ago, rates were above 8% for a 30 year fixed, and in 1991 they were more than 10 percent.

This data brings me to my reason for writing you today, TAKE ADVANTAGE OF THIS MARKET! Think outside the box!

So, buyers, combine the over supply of homes on the market (more than you could ever want to choose from) and a low demand (making you, the buyer the one with the power) and historically low rates (better than in great Real Estate market years) BUY NOW! It is truly an unbelievable opportunity to not just buy your first home, but to begin to purchase investment, second home or rental property for your future. I had one buyer purchase their golf course condo that they plan to retire in this December, a full 6 years before their planned retirement! Purchase an investment property when your child is a toddler, and let the equity grow so that at 18, you can sell the home and pay his or her college tuition! Buy a rental property in your 40’s so that by the time you are 60-70, you own it and live off of the rental income on a monthly basis when you are retired. NOW is the time to buy these homes, the market will only go UP!

A few quotes about the market that put this opportunity into perspective for you…

The BEST TIME TO BUY is when sellers fear tomorrow’s market will be worse than today! There is no waiting for the market to bottom out! There is no such thing, because the day we know the market has bottomed out, is the day it is getting better. Do you want to buy one day too early, or one day too late? Now is the time, call me and I will get you connected with Wells Fargo and get you moving to purchasing your first home or investment in your future!

The market is ripe for the picking and the rates are amazing! I am ready to help you make the investment for your future, and well equipped to do so!

Sharon Natarus with Wells Fargo in Cincinnati Ohio can be reached directly at 513-587-3524 or emailed at Sharon.Natarus@wellsfargo.com. Learn more about Sharon’s extraordinary customer service and creative style here.

• Buyers , Financing , Lending
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Amy January 14th, 2008

Update on Mortgages in Ohio Real Estate

The Ohio Mortgage Bankers Association (OMBA) released some very interesting data regarding their Q3 2007 figures that I felt compelled to share with my readers in Cincinnati, Ohio. As a resident, Realtor and Certified Residential Specialist, I feel that it is increasingly the local Realtors job to educate their local public on the state of the Real Estate market. I always suggest that the more local the data and information the better. You can’t form opinions regarding the Real Estate market from national news, based on California, Nevada or New York; you must look at what is happening in your state, city and suburb. This is my reason for writing a series of articles regarding the local real estate market. The more informed you are locally, the better the market will be for us locally.

Let’s start with Ohio, the state level and the recent figures released from the states Mortgage Bankers Association (OMBA). As you may have heard in the past, Ohio was a state of high foreclosure rates. When you break the state down by top 10 counties that these foreclosures are occurring in, Hamilton County, nor any other areas of Greater Cincinnati are amongst the top 10 that are the state’s worst counties for foreclosures. This is great to know if you live in or around Cincinnati, or its suburbs. And it lends to the mentality that the more local your information and news is, the better!

In the state of Ohio, The home ownership rate remains near record levels at 68.2% reports OMBA. This high rate of homeownership is almost record breaking, does not tell me that we are in despair in our Real Estate market. I wish these numbers were a part of the newspaper and evening news statistics!

The OMBA further suggests that 35% of Ohio homeowners own their homes outright, no mortgages at all! 48% are in a fixed rate mortgage, which is the conservative route, and almost half of Ohio residents are being conservative about their home financing, providing a stronger outlook for the future of the Ohio market! 15% of Ohioans have an Adjustable Rate Mortgage (ARM). And the smallest single group of people in Ohio, just 5% of homeowners is a non-prime or sub-prime borrower with adjustable rate mortgages. This is only 5% of Ohioans that have this higher rate loan that adjusts. The squeaky wheel gets the grease is TRUE! Why don’t we hear about the 35% who own their homes or the 48% who have the most conservative loans on the market? Instead, the newspaper and news casts prefer to report the doom and gloom when merely 5% of Ohioans that agreed to take a mortgage above prime rates and that adjusts gets into trouble. The media goes by the saying, “If it bleeds, it leads!” and that is causing so much of the bad press surrounding this Cincinnati Real Estate Market, which is simply not true!

In fact, in Ohio, the foreclosure rate is 1.7% of all loans in Ohio. The market tells us that a little over a half of that 1.7% will actually be foreclosed upon, but there are no exact numbers. The OMBA suggests that the number one cause for delinquencies and foreclosures is historically job related, most specifically so in the Mid-West, which has lost a significant number of manufacturing jobs. It is a fact that lenders want to lend money to borrowers who are willing and able to pay the loan back. They are not trying to induce a foreclosure situation! In fact, the OMBA estimates that between $30,000-$60,000 net loss occurs each time there is a foreclosure on a single property.

The lending community is taking note of these figures and situations that arise from these foreclosure situations. The competition in the lending marketplace has increased, leading the way for borrowers to find more options for their financing from the stronger, remaining lending institutions. The lenders are now pushing borrowers towards the more traditional mortgages, with down payments, fixed products and conventional loan options, which all help the borrower, the lender and the real estate market.

So, yes, Ohio has seen a small amount of foreclosures as state, Cincinnati and even smaller number of foreclosures. This concern over foreclosure figures has created more awareness in the lenders and loan options, which allows borrowers more education on their financing options. I hope that these numbers show you that in Cincinnati, we are going well, in Ohio, we are as well. Get your news locally, and there is always more good than bad, they just prefer to tell you the bad.

Hang in there and check back soon for some local articles on Hyde Park, Mount Lookout and other Cincinnati Suburb market conditions as they happened in 2007.
Data and statistics noted in this article are based onthe Ohio Mortgage Bankers Association’s Q3 2007 figures.

• Buyers , Financing , Foreclosures , Pricing , Trends
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Amy August 28th, 2007

A 5 part series on what steps you need to take to make buying the perfect home easy

As you make the decision to buy your first or next home, the most important first step is to talk to your Realtor, so that I can get you set in a direction that makes the entire process simple for you and as easy as possible. You can read here what other people who were buying a home from me thought of my ability to make things easy for them.

From my perspective as an Accredited Buyers Representative, completely educated and experienced in representing Buyers in their home purchase, I feel that talking with a lender is the most important Step in the entire process. Your financing is the foundation of your home search, it defines what you can and will buy.

Our first of this 5 part series focuses on Financing for your home purchase.

It doesn’t matter if you have never purchased a home before, if you are buying your eighth home, or are preparing to buy a second home for yourself, you must understand where your financial boundaries are. This is a critical element to the entire rest of the process of purchasing a property.

You must talk to a reputable local lender to determine your debit to income ratio, your credit scores and your reserves. All of these and more factor into the loan that you qualify for. I can give you a few lenders names that I work with, who have proven over the years to be honest, reputable, creative and provide excellent service. Based on the type of property or loan you need, I will give you a few lenders.

As you may have heard from others, “A lender will always tell you that you qualify for a home 3 times more expensive than you would want to buy.” This is true with lenders who are not as focused as my select group of associates. I prefer to approach the loan approval dollar figure in a different way.

Loan Approval: pull credit and prove income confidentially with lender constitutes a loan approval, this is more official that a pre-qualification or pre approval

As a client of mine, I assume you have a monthly figure in mind that you are comfortable paying for your mortgage payment. This figure will include Principal, Interest, Taxes and Insurance for your loan, known as PITI. That dollar figure can then be shared with the lender, who will then work that monthly payment backwards to tell you what price range you need to stay within in order to keep your payment at or below that monthly dollar amount. From there, we can stay under a certain price range to keep you comfortable, or go above, as long as you make the decision that the higher price is worth the extra monthly cost to you.

This is one of the first items to discuss with the lender during your loan approval process. The lender asks a multitude of questions that can be answered in about a 20-30 minute conversation. It is important for you to understand that your conversation with these lenders is confidential. Your income, your debit all of that is not to be shared with me, your Realtor. The lender assesses your situation and only shares with me the types of loans you qualify for and how I can negotiate in the contract to get you the best financial terms possible. At no time am I privy to your credit scores, or income figures etc. This is important to me, that you are comfortable with me as your Realtor to sell you a home, I do not need to know that info, only what your price range is and the type of loan you are getting so I can help you capitalize on your negotiations.

See typical Pre Approval Questions here.

Once the lender has the info necessary, they can give you an idea of where your price range should fall. Once this has been determined, they can be prepared to write you a letter of  loan approval once we find a property that meets your needs.

A note about your loan approval letter. I find it most beneficial to the buyer to have a loan approval letter that does not provide the dollar amount that the buyer is qualified to buy. It is best to just simply state that the “buyer is qualified to purchase the property located at 123 Dream Street, Cincinnati, OH.� That way the sellers know you can purchase the property based on the listing price, not that you will pay list price. The local lenders that I work with all agree to this type of loan approval letter. Many out of town lenders will not do this as they do not have a relationship with me to agree to this type of letter, and thus they reduce your bargaining position with the seller during the contract negotiation.

This loan approval letter allows me to catapult into my illustrious Preferred Buyers Program! This program gives you priority service when scheduling showings and working to find your home. Having a loan approval is your ticket to a stronger contract and a smoother purchase process. So many times my clients were the winner in a multiple offer situation just because they had a loan approval and the other buyer did not. In strong markets or areas, loan approvals are required with an offer. As a listing agent myself, I will not allow my clients to agree to a contract without seeing a loan approval letter from a financial institution.

In the Preferred Buyers Program, loan approved buyers with local lenders are entered in to the MLS system to get daily updates on local listings that meet their criteria. If you want a 3 bedroom, 2 full bath 2 car garage in Hyde Park, Ohio, priced between 200-300K, then as a home that meets this criteria enters the market, or takes a price reduction, you will be notified immediately via email. This gives you up to the minute info on new listings and recent price reductions that relate to you and your needs. You may get 2 emails a day with new listings. From these MLS emails we will work to compile a list of homes that we can tour and get our feet wet. This gives you a little preview into the second part of the 5 part article, defining the type and location of your home.

It is further important to become loan approved so that we aren’t spinning our wheels in the wrong price range. If you start to see homes that are 100K more than you can afford, once we get you back down into the range that you are approved for, there will be a great deal of disappointment, taking the excitement right out of buying your home. If we look to low, then you don’t know what you are missing in a nicer neighborhood or school district. We can be precise and informed when you are loan approved making the entire process easier for you!

It is important for people who have recently become divorced to be loan approved as financial situations change a great deal and effect the price ranges more than you might realize.

It is important to become loan approved if you haven’t sold your home and plan to buy another before selling. Sometimes this is impossible and you must or want to sell first. It is best to know what you can and cannot do. Many people find out that they need to sell before they can buy in the price range they desire. Others find that they can buy without selling (although risky.)

It is important to become loan approved if you are considering buying a second property that you may not live in or live in part time. Rates are different for these property purchases, and many require higher down payments, so this could considerably affect your purchasing power for your second home.

Many people have no idea what their credit scores are and thus get a better or worse rate when they finally speak to a lender.

Now a little more on a local lender. It is absolutely KEY to the Preferred Buyers Program and your overall experience of purchasing a home to use a local lender in Cincinnati or Northern Kentucky. There are so many regional differences in tax and transfer laws, local traditions as they relate to who pays what in closing costs (See article on typical Closing Costs here), and which local title companies do the best job closing the loans that a local lender will ensure a smooth process. The lenders that I refer have proven themselves through experience with my clients to provide excellent knowledge and service for my clients. I ONLY recommend lenders who I have worked with before, who my clients have raved about, and who have provided the type of service to my clients that I give them myself. I have seen internet lenders fail to have the concern or attention to detail that my trusted local lenders do. I have seen out of state lenders and internet lenders fail to make sure their customer, the buyer, lock in on a rate in a timely fashion costing them thousands of dollars during the life of their loan. I have seen these out of town lenders fail to insist upon an appraisal to make sure the buyer isn’t paying more than the property is worth. I have seen out of town lenders not quote taxes correctly to the buyer and thus approved the buyer for the wrong purchase amount, based on a $300 a month tax bill. Once this was found, the buyer could no longer afford to buy the home that they had already negotiated and paid for a home inspection on etc. Wasting time and money of their “client”? The out of town lenders do not feel the obligation to service you well or get you a great deal or give you the benefit of the doubt like my local lenders do, because they will never see you or me again. My local network will guarantee excellent service, tireless attention to detail, direct contact numbers and communication with you and me, your Realtor. They know that if they don’t provide excellent service, they will not be hearing from me or my clients again. Local lenders will allow me to help you with the small details of the loan process while you are busy at work with more pressing issues. Choosing a local lender is the best possible decision you can make, and key in the home buying process.

The more informed we are at this first step, the foundation, of the Home Buying Process, the better the entire experience will be! I have proven this method time and time again, be the next to buy a home with me!

In my next article we will move on to the second key part of the Home Buying Process, defining the type and location of your home.

• Closing Documents , Financing , Lending , Listing , Pre-Approval , Sellers
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Sharon Natarus March 7th, 2007

There is so much more involved to getting a mortgage than getting the “Lowest Rate” Here are a few things I do for my valued clients, proving that its about the service provided and the whole package and not only about the rate…

1. I personally like to evaluate a client’s full financial picture. Maybe they should finance 100% and eliminate all of their debt or bits and pieces of it.

2. Should they do one loan at 100% or two loans such as 80/20, pay PMI (Private Mortgage Insurance) or have a higher interest rate and no PMI.

3. Each loan is custom tailored to fit the client’s individual needs today and help them achieved their financial goals.

4. Is the lender a national lender? Wells is a national lender and finances one in every 16 homes throughout the country. Wells is the only AAA rated retail mortgage lender in the country!

5. I am available to help with questions after the closing and throughout the life of the loan. I generally send marketing pieces at least four times throughout the year.

6. Ask for a good faith estimate and compare closing costs!!! Ask for clarification of costs.

7. Can the interest rate be locked and guaranteed?

8. You want to make sure there are no surprises at the closing table! Take recommendations from your Realtor! They work with lenders daily and can recognize red flags!!!

About Sharon

• Buyers , Financing , Lending
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Amy March 7th, 2007

I was recently scanning the loan programs for a client of mine looking for 100% financing. It turns out that 100% financing is the most common form of financing in the US today. After looking into some options for them, this particular “No Money Down Plus� program seemed to be a fit for my clients. Sharon Natarus of Wells Fargo has made some additional comments below on this new product:

Here are some thoughts on the 100% NO Money Down Program. Many people have chosen the 80/20 program over the last several years, but there is a nice alternative for people that one to have “one loan and one payment” Our product is the No Money Down Plus. We can offer a fixed rate for 30 years. Many times the payment is lower than 80/20 ( if a customer chooses a fixed product for the 2nd, the rate is higher and the payment is higher due to the principal and interest payment on the 2nd mortgage). It gives the customer the peace of mind that the payments are predictable. We can also finance up to 3% of the borrower’s closing costs and pre-paids. We can also offer a slightly higher rate to avoid PMI. The requirements are a minimum credit score of 680 and 2 months payment reserves. The reserves may be in a 401k or other savings program.

To summarize the “No Money Down Plus� allows borrowers to

• have a credit score of 680+
• allows them to only have 2 months of payment reserves (can be in a 401K)
• offers a fixed rate for predictable payments
• allows the borrower to finance up to 3% of the closing costs and prepaids (on a 150K home that is $4,500 which should cover those costs)
• allows you to avoid PMI which is often not Tax Deductible

Call Sharon if you have an interest in learning more about this program today at 513-587-3524 or Toll Free Phone: (800) 846-2240
http://www.sharonnatarus.com

About Sharon

• Buyers , Financing , Lending
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Ron February 6th, 2007

I hear this question from 75% of my customers whenever I suggest a second mortgage. This stereotype is often communicated because of phrases like, I had to take out a second mortgage on my house in order to pay for this!

But contrary to popular belief, a second mortgage is a creative mortgage planning tool that is usually reserved for only the most credit-worthy customers. As such, a second mortgage is often the most cost-effective method to finance a down payment, to avoid costly private mortgage insurance, or to make other large purchases.

By dividing up a mortgage loan into two components, like a first mortgage and a second mortgage, I show my clients how to minimize the amount of interest and private mortgage insurance that they pay. To demonstrate with a specific example:

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• Buyers , Financing , Lending
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Sharon Natarus January 28th, 2007

One of the highlights of my job is having the opportunity to help people buy their first home! I like to spend approximately 10-20 minutes on the phone to gather some information from the customer. The buyer will
probably know all of this information by memory. Here are some questions that I generally ask:

PERSONAL INFORMATION:

Name
Address for the past two years/name and phone number of landlord
Social security number and date of birth
Name and address of his/her employer for the last two years
Income: hourly, weekly, monthly or annual
Current Rent payment
Bank account numbers and balances

OTHER QUESTIONS:

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• Buyers , Financing , Pre-Approval
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