Wednesday, August 31, 2011
Check out Denver Real Estate Weekly M...
Check out Denver Real Estate Weekly Market Update titled "How to do Fix and Flips, Part Two" at http://ow.ly/6hG4n
Check out Denver Real Estate Weekly M...
Check out Denver Real Estate Weekly Market Update titled "How to do Fix and Flips, Part Two" at http://ow.ly/6hG4n
Check out Denver Real Estate Weekly M...
Check out Denver Real Estate Weekly Market Update titled "How to do Fix and Flips, Part Two" at http://ow.ly/6hG4n
Tuesday, August 30, 2011
Check out my latest real estate colum...
Check out my latest real estate column titled "Time to Update, Part Two" at http://ow.ly/6gA7v
Check out my latest real estate colum...
Check out my latest real estate column titled "Time to Update, Part Two" at http://ow.ly/6gA7v
Check out my latest real estate colum...
Check out my latest real estate column titled "Time to Update, Part Two" at http://ow.ly/6gA7v
Time to Update, Part Two. By Dan Polimino.
Last month, I wrote a column about updating our home and how I realized that my home was out-of-date by looking at other homes in my neighborhood with clients.
I soon came to the conclusion that if I wanted to keep up with the times or sell my home anytime soon, I better update it and make sure that it presents itself as a good value. If you would like to re-read that column, you can find it at coloradodreamhouse.com and click on the "news" button. That column led to several people emailing me, asking exactly what I did to "create more value and update the house." What they really wanted to know was if there were some projects they could do that would not cost a fortune, but would add value. So here is what I did on a budget:
• I changed all the hardware in the house. I had that very popular late '90s brass throughout the whole house. I switched out every door handle, every towel bar, hinge, doorstop, and every lock. Since I hear constant disagreements about whether or not brushed nickel or silver is in, I went in the other direction and installed oil rubbed bronze. It matches better with my home and tends to be timeless.
• Next, I changed every light fixture inside and outside of the house. Again, matching the oil rubbed bronze theme. Together, between the hardware and the light fixtures, I kept the budget under $2,000.
• I painted. This is easy because paint is cheap and only requires some elbow grease. A fresh coat of paint inside makes a house really shine. Since I am not handy, I got a reasonable bid to paint the entire inside of my home for $3,000.
• If you have a little more money, start to look at your flooring. We have had it with carpeting! We have some hardwood floors in the house already, but are leaning toward going all hardwood upstairs and down. We got a bid for $10,000 on this project.
• Finally, the last project we'll do is update the kitchen and baths. So far, I have been able to ascertain that I can update the kitchen counter tops and back splash for about $4,000 and three bathrooms for about $8,000.
If you add it all up, it's about $27,000 depending on your taste. That may seem like a lot, but when you are done, the entire inside of your home is updated for 10-15 years. You could also do it like us, which is to tackle a few projects at a time. We plan on being finished before next spring, which spreads out the expense.
Dan Polimino is a Realtor with Fuller Sotheby's International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost
I soon came to the conclusion that if I wanted to keep up with the times or sell my home anytime soon, I better update it and make sure that it presents itself as a good value. If you would like to re-read that column, you can find it at coloradodreamhouse.com and click on the "news" button. That column led to several people emailing me, asking exactly what I did to "create more value and update the house." What they really wanted to know was if there were some projects they could do that would not cost a fortune, but would add value. So here is what I did on a budget:
• I changed all the hardware in the house. I had that very popular late '90s brass throughout the whole house. I switched out every door handle, every towel bar, hinge, doorstop, and every lock. Since I hear constant disagreements about whether or not brushed nickel or silver is in, I went in the other direction and installed oil rubbed bronze. It matches better with my home and tends to be timeless.
• Next, I changed every light fixture inside and outside of the house. Again, matching the oil rubbed bronze theme. Together, between the hardware and the light fixtures, I kept the budget under $2,000.
• I painted. This is easy because paint is cheap and only requires some elbow grease. A fresh coat of paint inside makes a house really shine. Since I am not handy, I got a reasonable bid to paint the entire inside of my home for $3,000.
• If you have a little more money, start to look at your flooring. We have had it with carpeting! We have some hardwood floors in the house already, but are leaning toward going all hardwood upstairs and down. We got a bid for $10,000 on this project.
• Finally, the last project we'll do is update the kitchen and baths. So far, I have been able to ascertain that I can update the kitchen counter tops and back splash for about $4,000 and three bathrooms for about $8,000.
If you add it all up, it's about $27,000 depending on your taste. That may seem like a lot, but when you are done, the entire inside of your home is updated for 10-15 years. You could also do it like us, which is to tackle a few projects at a time. We plan on being finished before next spring, which spreads out the expense.
Dan Polimino is a Realtor with Fuller Sotheby's International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost
Thursday, August 25, 2011
Read "Real Estate Agents and Lenders:...
Read "Real Estate Agents and Lenders: Love Story or War of the Roses?" at http://ow.ly/6cE11
Read "Real Estate Agents and Lenders:...
Read "Real Estate Agents and Lenders: Love Story or War of the Roses?" at http://ow.ly/6cE11
Read "Real Estate Agents and Lenders:...
Read "Real Estate Agents and Lenders: Love Story or War of the Roses?" at http://ow.ly/6cE11
Real Estate Agents and Lenders: Love Story or War of the Roses?
Most of the time the symbiotic relationship between real estate agents and lenders is more like the movie Love Story than War of the Roses, with a kumbaya moment at the closing that often turns into a mutual admiration society for all involved. Nothing is better than a borrower thanking you for a good job and saying the process was easier than they expected. Communication, coordination, and realistic expectations are essential to insure a smooth closing on time. While mortgage underwriters have the ability to read minds and see the future, loan officers do not. Everyone needs to be on the same page. One guiding principal I have noticed among agents who have the least problems in closing deals is "Proper Planning Prevents Poor Performance."
While all real estate agents are different, I have noticed some common practices with professional real estate agents and part time agents who might, in a good year, be involved in two transactions. Most experienced real estate agents today are relatively hands off and do not want to play lender or be bothered with minor details when they could better use their time in other ways. As one top producing Realtor told me, "Unless there is a problem, see you at the closing. I do not watch or give advice to my mechanic. I trust him to do his job, or I will find some one who will get the job done." Getting the inspection out of the way as soon as possible is another common practice with experienced agents. We do not want to order the appraisal before we know the inspection results. With the wonderful rules governing the appraisal process created by the Home Valuation Code of Conduct (HVCC), appraisals may take longer than they used to. Help your lender help you. Please do not wait three weeks to do the inspection when the closing is scheduled 30 days out. The more professional agents know what they know, and every bit as important, know what they do not know and they plan ahead. The mortgage maze is incredibly complex today and accurate information is important. When a mortgage question comes up, smart real estate agents have a simple response that is in everyone's best interest: I am a real estate expert, not a mortgage expert. Talk to the lender. Experienced agents plan ahead and do not call at 7PM on a Sunday night needing to know instantly the mortgage payment, down payment, etc., because these have already been discussed with the buyer in advance.
I have noticed the old phrase "Jack of all trades, master of none" applies to a lot of the part time agents (also known as "Realtorettes") who mean well but do not have a clue about the current mortgage industry. Realtorettes is a phrase I heard years ago to describe someone who works full time as a bartender and occasionally does real estate on the side. Common examples are quoting interest rates (but they always forget the fees), down payments, advice on credit, etc. Just because something makes sense or we used to be able to do it that way no longer applies and can delay or kill a loan. A good example of this is a well meaning real estate agent who told a buyer to pay off some collections before the closing. Makes sense, right? Except that paying off the collections dropped the borrower's credit score below the allowable level for the type of mortgage they had applied for. I have picked up deals where Realtorettes told the borrower they could not qualify and seen deals where the agent wasted a lot of time showing property to someone they were sure would qualify.
Chip Allen
Crestline Mortgage Bankers
A Division of Universal Lending Corp
Direct: 303.947.2109
Fax: 303.987.0676
Loanchip@hotmail.com
Colorado Mortgage Broker License # 100019831
NMLS# 378621
Your Lender for Life!
When people you care about need a mortgage,
for purchase or refinance, please do not keep me a secret.
While all real estate agents are different, I have noticed some common practices with professional real estate agents and part time agents who might, in a good year, be involved in two transactions. Most experienced real estate agents today are relatively hands off and do not want to play lender or be bothered with minor details when they could better use their time in other ways. As one top producing Realtor told me, "Unless there is a problem, see you at the closing. I do not watch or give advice to my mechanic. I trust him to do his job, or I will find some one who will get the job done." Getting the inspection out of the way as soon as possible is another common practice with experienced agents. We do not want to order the appraisal before we know the inspection results. With the wonderful rules governing the appraisal process created by the Home Valuation Code of Conduct (HVCC), appraisals may take longer than they used to. Help your lender help you. Please do not wait three weeks to do the inspection when the closing is scheduled 30 days out. The more professional agents know what they know, and every bit as important, know what they do not know and they plan ahead. The mortgage maze is incredibly complex today and accurate information is important. When a mortgage question comes up, smart real estate agents have a simple response that is in everyone's best interest: I am a real estate expert, not a mortgage expert. Talk to the lender. Experienced agents plan ahead and do not call at 7PM on a Sunday night needing to know instantly the mortgage payment, down payment, etc., because these have already been discussed with the buyer in advance.
I have noticed the old phrase "Jack of all trades, master of none" applies to a lot of the part time agents (also known as "Realtorettes") who mean well but do not have a clue about the current mortgage industry. Realtorettes is a phrase I heard years ago to describe someone who works full time as a bartender and occasionally does real estate on the side. Common examples are quoting interest rates (but they always forget the fees), down payments, advice on credit, etc. Just because something makes sense or we used to be able to do it that way no longer applies and can delay or kill a loan. A good example of this is a well meaning real estate agent who told a buyer to pay off some collections before the closing. Makes sense, right? Except that paying off the collections dropped the borrower's credit score below the allowable level for the type of mortgage they had applied for. I have picked up deals where Realtorettes told the borrower they could not qualify and seen deals where the agent wasted a lot of time showing property to someone they were sure would qualify.
Chip Allen
Crestline Mortgage Bankers
A Division of Universal Lending Corp
Direct: 303.947.2109
Fax: 303.987.0676
Loanchip@hotmail.com
Colorado Mortgage Broker License # 100019831
NMLS# 378621
Your Lender for Life!
When people you care about need a mortgage,
for purchase or refinance, please do not keep me a secret.
Tuesday, August 23, 2011
Check out my latest real estate colum...
Check out my latest real estate column titled "The Bait and Switch" at http://ow.ly/6axmo
Check out my latest real estate colum...
Check out my latest real estate column titled "The Bait and Switch" at http://ow.ly/6axmo
Check out my latest real estate colum...
Check out my latest real estate column titled "The Bait and Switch" at http://ow.ly/6axmo
The Bait and Switch. By Dan Polimino.
When I came out of college, I got a job selling cars and some of my fellow car salesmen were involved in the old "bait and switch" tactics of selling. If a customer came in and it looked like they were not going to be buying that day, the salesman would let them leave the dealership with a monthly payment that no one in town would be able to match. The price was so low it was almost hard to believe. Of course, the customer would go and shop around for the same car, but as expected, no other dealer could match the price. The customer eventually came back to the dealership to buy the car, but that price was no longer available. This tactic is not unique to the car business. In fact, many different types of businesses have been guilty of this practice. In real estate, the most common form of this happens on the lending side of buying a home, and here is how it goes.
A buyer, we'll call him "Joe," will call around and speak with a few lenders about getting a loan to buy a home. They'll talk about rate, fees, and what's needed to close the deal. Joe may get promised a lot of things over the phone. In fact, he may just strike an incredible deal, but it means nothing until Joe gets it in writing. Now, if the lender that made all the promises really can't deliver, chances are, he won't put them in writing. If he does, he may try to put them in a document called an "Initial Fees Worksheet." The problem with an IFW is that it is not a binding document. If Joe wants to find out if the lender is serious and can deliver on his promises he'll ask for a GFE, or Good Faith Estimate. This is a binding contract between the lender and the buyer. The lender must provide the loan stated in the GFE to the buyer as long as the buyer was truthful with the information provided to the lender on his or her financial picture. If a lender is not willing to send you a GFE, then he or she is not willing to stand by their promises they made to you over the phone.
Buyers should beware of bait and switch tactics. Incredible deals and rates given over the phone mean nothing until you get it on a GFE. Once you have it on a GFE, then you can shop it around.
Dan Polimino is a Realtor with Fuller Sotheby's International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost
A buyer, we'll call him "Joe," will call around and speak with a few lenders about getting a loan to buy a home. They'll talk about rate, fees, and what's needed to close the deal. Joe may get promised a lot of things over the phone. In fact, he may just strike an incredible deal, but it means nothing until Joe gets it in writing. Now, if the lender that made all the promises really can't deliver, chances are, he won't put them in writing. If he does, he may try to put them in a document called an "Initial Fees Worksheet." The problem with an IFW is that it is not a binding document. If Joe wants to find out if the lender is serious and can deliver on his promises he'll ask for a GFE, or Good Faith Estimate. This is a binding contract between the lender and the buyer. The lender must provide the loan stated in the GFE to the buyer as long as the buyer was truthful with the information provided to the lender on his or her financial picture. If a lender is not willing to send you a GFE, then he or she is not willing to stand by their promises they made to you over the phone.
Buyers should beware of bait and switch tactics. Incredible deals and rates given over the phone mean nothing until you get it on a GFE. Once you have it on a GFE, then you can shop it around.
Dan Polimino is a Realtor with Fuller Sotheby's International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost
Wednesday, August 17, 2011
Check out Denver Real Estate Weekly M...
Check out Denver Real Estate Weekly Market Update titled "How to do Fix and Flips, Part One" at http://ow.ly/65C9m
Check out Denver Real Estate Weekly M...
Check out Denver Real Estate Weekly Market Update titled "How to do Fix and Flips, Part One" at http://ow.ly/65C9m
Check out Denver Real Estate Weekly M...
Check out Denver Real Estate Weekly Market Update titled "How to do Fix and Flips, Part One" at http://ow.ly/65C9m
Tuesday, August 16, 2011
Check out my latest real estate colum...
Check out my latest real estate column titled "Short Sales Are Different In All States" at http://ow.ly/64scX
Check out my latest real estate colum...
Check out my latest real estate column titled "Short Sales Are Different In All States" at http://ow.ly/64scX
Check out my latest real estate colum...
Check out my latest real estate column titled "Short Sales Are Different In All States" at http://ow.ly/64scX
Short Sales Are Different In All States. By Dan Polimino.
I was speaking with a few of my brethren in the real estate business around the country and the conversation centered on 'short sales.' Apparently, short sales are not treated the same way from sea to shining sea. My friend in Atlanta, GA works exclusively on short sales and does quite well. In fact, not only does she list them, but she sells them and gets them under contract and closed in 30-60 days. When I heard this, I almost fell off the chair. I told her that in Colorado, we cannot get the banks to respond to short sale offers and generally, the closing time for a short sale in Colorado is 3-6 months, if you can get it closed at all. I was speaking with a colleague in Philadelphia, and he was telling me that his brokerage firm was having absolutely no problems getting the banks to respond.
Soon after that, I did a little more research and began to realize that the banks were responding differently to homeowners in different states. Why would the banks be responsive in Georgia and Pennsylvania, but not in Colorado? I know agents these days use short sales negotiators in the selling of a home and we have used them from time to time. I think short sale negotiators are great and valuable. In the cases where we have used them, they have clearly earned their money and got the property closed in a shorter amount of time, but not in 30-60 days like in Atlanta.
I have been unable to get a bank to tell me why the difference between States, but one thing is clear in the whole process. There needs to be some type of regulation and reform on how banks handle short sales across the nation. For some time now, Realtors have been calling for a standard policy on short sales. I have heard various ideas like a 30-10 rule where the banks would have to respond to offers in 10 days after receiving the contract and then be able to close the transaction in 30 days. One thing is clear: the massive amount of short sales will soon be foreclosures, unless the banks make a concerted effort to change their ways, respond to offers, and get short sales closed.
Dan Polimino is a Realtor with Fuller Sotheby's International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost
Soon after that, I did a little more research and began to realize that the banks were responding differently to homeowners in different states. Why would the banks be responsive in Georgia and Pennsylvania, but not in Colorado? I know agents these days use short sales negotiators in the selling of a home and we have used them from time to time. I think short sale negotiators are great and valuable. In the cases where we have used them, they have clearly earned their money and got the property closed in a shorter amount of time, but not in 30-60 days like in Atlanta.
I have been unable to get a bank to tell me why the difference between States, but one thing is clear in the whole process. There needs to be some type of regulation and reform on how banks handle short sales across the nation. For some time now, Realtors have been calling for a standard policy on short sales. I have heard various ideas like a 30-10 rule where the banks would have to respond to offers in 10 days after receiving the contract and then be able to close the transaction in 30 days. One thing is clear: the massive amount of short sales will soon be foreclosures, unless the banks make a concerted effort to change their ways, respond to offers, and get short sales closed.
Dan Polimino is a Realtor with Fuller Sotheby's International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost
Thursday, August 11, 2011
Check out my latest blog post titled ...
Check out my latest blog post titled "Portfolio and Private Money Mortgages" at http://ow.ly/60I60
Check out my latest blog post titled ...
Check out my latest blog post titled "Portfolio and Private Money Mortgages" at http://ow.ly/60I60
Check out my latest blog post titled ...
Check out my latest blog post titled "Portfolio and Private Money Mortgages" at http://ow.ly/60I60
Portfolio and Private Money Mortgages
Nature abhors a vacuum. With the tightening in the mortgage market we have seen an increase in portfolio and private, also known as hard money, loans to fill the void created since subprime mortgage products have become extinct. The good news is that borrowers who do not fit in the box for a standard FHA, VA, or conventional mortgage now have options. The bad news is that rates, liquid assets after the closing for reserve requirements, "skin in the game", etc., will probably be higher. Skin in the game is defined as the amount of equity or down payment one has. Once in a great there is still some common sense in the mortgage environment, although it is not very common overall. Fortunately we have learned from the past, and borrowers with a 580 credit score, who can not prove their income and need 100% financing will not qualify. We have enough foreclosures already and some borrowers are train wrecks waiting to happen.
A portfolio loan is a mortgage that is held by a bank, as opposed to a loan that is underwritten to a set of specifications that would allow it to be sold on the secondary market. An example of a loan that meets a given set of specifications, that would allow it to be sold in the secondary market, would be the good old boring (but a thing of beauty these days) FHA mortgage. Portfolio loans are mortgages that lenders plan to keep and not sell. These loans are written to a set of standards that make sense but do not fit into the guidelines for a FHA, VA, or conventional mortgages. An excellent example of a portfolio loan would be the US Bank products that have loan to values over 80% and do not require mortgage insurance.
Private money loans may involve people known to the lender before the transaction, or it may be an arms length transaction where there is no history between the borrower and the person who lends the money. An example of the first type is grandparents lending grandchildren money to purchase real estate to live in or for investment. The lender receives a return that is superior to what they were earning in a savings account, the borrower may acquire an interest rate that is less than they would pay on the open market and/or be able to get a mortgage they would not qualify for in the traditional mortgage arena. A true win-win situation for all involved. If you are considering doing this, I strongly encourage you to seek qualified tax counsel to make sure you do not run afoul of any IRS laws that may impact what interest rate you need to charge to family members.
In an arms length transaction private money loans, funded by individuals or private investor groups, often have a minimum of criteria to qualify for a loan. The first two questions that private money lenders usually ask is: 1) how will you pay me back, and 2) do you have AT LEAST 25% equity or cash for a down payment. The money may be for a fix and flip or a short term "band aid" loan. A band aid loan is used to cure an immediate problem such as a pending foreclosure, etc., while giving the borrower time to get back on their feet. Private money lenders have more flexibility when looking at a loan. One example would be to cross collateralization the loan to make the deal viable. Cross collateralization, also known as a "blanket mortgage", is when the loan is secured by more than one property or additional collateral. This does not happen in the traditional mortgage market. Most arms length private money loans are due in less than three years. Rates on private money loans vary widely. Some private money lenders are charging up to 14% annual interest AND four points to borrowers with a dismal track record. There is a relationship between risk and return and those with the gold make the rules. It is what is.
By the way, you can differentiate between a private money lender and a predatory lender. A private money lender is interested in getting his money back, while the desired outcome for a predatory lender is to acquire the property through a foreclosure. A true predatory lender wants the loan to default. Private money lending appears to fall within a gray area of the law, and private money lenders are not bound by the same stringent guidelines as banks or mortgage companies. If you choose to go this way, make sure you understand everything about the proposed new loan. Pay particular attention to when it is due, prepayment penalties, etc. Never forget that "if it looks too good to be true, something is wrong".
As always, do the numbers, and review everything carefully. Caveat Emptor is an old Latin phrase that means "let the buyer beware". It applies to every business situation, especially with private money loans.
Chip Allen
Crestline Mortgage Bankers
A Division of Universal Lending Corp
Direct: 303.947.2109
Fax: 303.987.0676
Loanchip@hotmail.com
Your Lender for Life!
When people you care about need a mortgage,
for purchase or refinance, please do not keep me a secret.
A portfolio loan is a mortgage that is held by a bank, as opposed to a loan that is underwritten to a set of specifications that would allow it to be sold on the secondary market. An example of a loan that meets a given set of specifications, that would allow it to be sold in the secondary market, would be the good old boring (but a thing of beauty these days) FHA mortgage. Portfolio loans are mortgages that lenders plan to keep and not sell. These loans are written to a set of standards that make sense but do not fit into the guidelines for a FHA, VA, or conventional mortgages. An excellent example of a portfolio loan would be the US Bank products that have loan to values over 80% and do not require mortgage insurance.
Private money loans may involve people known to the lender before the transaction, or it may be an arms length transaction where there is no history between the borrower and the person who lends the money. An example of the first type is grandparents lending grandchildren money to purchase real estate to live in or for investment. The lender receives a return that is superior to what they were earning in a savings account, the borrower may acquire an interest rate that is less than they would pay on the open market and/or be able to get a mortgage they would not qualify for in the traditional mortgage arena. A true win-win situation for all involved. If you are considering doing this, I strongly encourage you to seek qualified tax counsel to make sure you do not run afoul of any IRS laws that may impact what interest rate you need to charge to family members.
In an arms length transaction private money loans, funded by individuals or private investor groups, often have a minimum of criteria to qualify for a loan. The first two questions that private money lenders usually ask is: 1) how will you pay me back, and 2) do you have AT LEAST 25% equity or cash for a down payment. The money may be for a fix and flip or a short term "band aid" loan. A band aid loan is used to cure an immediate problem such as a pending foreclosure, etc., while giving the borrower time to get back on their feet. Private money lenders have more flexibility when looking at a loan. One example would be to cross collateralization the loan to make the deal viable. Cross collateralization, also known as a "blanket mortgage", is when the loan is secured by more than one property or additional collateral. This does not happen in the traditional mortgage market. Most arms length private money loans are due in less than three years. Rates on private money loans vary widely. Some private money lenders are charging up to 14% annual interest AND four points to borrowers with a dismal track record. There is a relationship between risk and return and those with the gold make the rules. It is what is.
By the way, you can differentiate between a private money lender and a predatory lender. A private money lender is interested in getting his money back, while the desired outcome for a predatory lender is to acquire the property through a foreclosure. A true predatory lender wants the loan to default. Private money lending appears to fall within a gray area of the law, and private money lenders are not bound by the same stringent guidelines as banks or mortgage companies. If you choose to go this way, make sure you understand everything about the proposed new loan. Pay particular attention to when it is due, prepayment penalties, etc. Never forget that "if it looks too good to be true, something is wrong".
As always, do the numbers, and review everything carefully. Caveat Emptor is an old Latin phrase that means "let the buyer beware". It applies to every business situation, especially with private money loans.
Chip Allen
Crestline Mortgage Bankers
A Division of Universal Lending Corp
Direct: 303.947.2109
Fax: 303.987.0676
Loanchip@hotmail.com
Your Lender for Life!
When people you care about need a mortgage,
for purchase or refinance, please do not keep me a secret.
Wednesday, August 10, 2011
Check out "Back On Market in Highland...
Check out "Back On Market in Highlands Ranch, Colorado" at http://ow.ly/600bh
Check out "Back On Market in Highland...
Check out "Back On Market in Highlands Ranch, Colorado" at http://ow.ly/600bh
Check out "Back On Market in Highland...
Check out "Back On Market in Highlands Ranch, Colorado" at http://ow.ly/600bh
Tuesday, August 9, 2011
Check out my latest real estate colum...
Check out my latest real estate column titled "The Foreclosures Are Not Coming" at http://ow.ly/5YMdm
Check out my latest real estate colum...
Check out my latest real estate column titled "The Foreclosures Are Not Coming" at http://ow.ly/5YMdm
Check out my latest real estate colum...
Check out my latest real estate column titled "The Foreclosures Are Not Coming" at http://ow.ly/5YMdm
The Foreclosures Are Not Coming. By Dan Polimino.
Every spring right around March, I start hearing all the alarms, all the warning bells, and all the Doom Sayers crying, "The Foreclosures Are Coming, The Foreclosures Are Coming!!!" They go on to alert the public that the banks are getting ready to unload a massive amount of foreclosures on the market. As a result, home prices are going to fall, the market is going to be flooded, and the economy will be depressed. Every year for the last four years, I have heard this same narrative and every year, IT HAS NOT HAPPENED. Why?
All anyone needs to do to understand why this has not happened and why it is not going to happen is study up on banking and balance sheets. You see, banks are healthy right now (plenty of cash) and so are their balance sheets. The balance sheets are important to the banks' shareholders and investors. Let's say that the bank has a lot of foreclosed properties on their balance sheet, priced at "X." Chances are, when the bank releases those homes on the market, they are not going to sell at "X"; they'll sell considerably cheaper at "Y." Once that happens, the bank will need to maintain the balance sheet by writing down the loss. Now, the bank can do this without upsetting too much of the balance sheet and investors if they do it a little at a time. What they can't do is dump 100, 200, or 300 million dollars of property on the market at one time and then write down that loss in one lump sum. That would upset investors, shareholders, and the balance sheet. Instead, what banks do is slowly release a few foreclosures at a time into the marketplace and then write down those losses, never really turning the balance sheet upside down. This is exactly the formula that they have followed for the last four years.
One bank executive told me that he is under enormous pressure from the public to release his foreclosures to the marketplace, but will not do so for the reasons I mentioned above. So the next time you hear people sounding the alarms that the "foreclosures are coming," don't believe them. They haven't for the last four years and they are not likely to do so in the near future. As long as the banks are flush with cash, I would expect the process to remain the same.
Dan Polimino is a Realtor with Fuller Sotheby's International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost
All anyone needs to do to understand why this has not happened and why it is not going to happen is study up on banking and balance sheets. You see, banks are healthy right now (plenty of cash) and so are their balance sheets. The balance sheets are important to the banks' shareholders and investors. Let's say that the bank has a lot of foreclosed properties on their balance sheet, priced at "X." Chances are, when the bank releases those homes on the market, they are not going to sell at "X"; they'll sell considerably cheaper at "Y." Once that happens, the bank will need to maintain the balance sheet by writing down the loss. Now, the bank can do this without upsetting too much of the balance sheet and investors if they do it a little at a time. What they can't do is dump 100, 200, or 300 million dollars of property on the market at one time and then write down that loss in one lump sum. That would upset investors, shareholders, and the balance sheet. Instead, what banks do is slowly release a few foreclosures at a time into the marketplace and then write down those losses, never really turning the balance sheet upside down. This is exactly the formula that they have followed for the last four years.
One bank executive told me that he is under enormous pressure from the public to release his foreclosures to the marketplace, but will not do so for the reasons I mentioned above. So the next time you hear people sounding the alarms that the "foreclosures are coming," don't believe them. They haven't for the last four years and they are not likely to do so in the near future. As long as the banks are flush with cash, I would expect the process to remain the same.
Dan Polimino is a Realtor with Fuller Sotheby's International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost
Thursday, August 4, 2011
Read my latest blog post titled "Has ...
Read my latest blog post titled "Has it become easier to get a mortgage in the last three years?" at http://ow.ly/5V8hW
Read my latest blog post titled "Has ...
Read my latest blog post titled "Has it become easier to get a mortgage in the last three years?" at http://ow.ly/5V8hW
Read my latest blog post titled "Has ...
Read my latest blog post titled "Has it become easier to get a mortgage in the last three years?" at http://ow.ly/5V8hW
Has it become easier to get a mortgage in the last three years?
Has it become easier to get a mortgage in the last three years? Not from what I am seeing. Whether it is a conventional, FHA, or VA mortgage, in most instances, it is harder to obtain a mortgage than it was just three years ago. The good old bad days are gone forever, and the mortgages must meet higher standards with increased documentation for verification. A mortgage must fit precisely into the box with very little wiggle room. Policy and procedure always reflects the worst abuses in the past and we are seeing that now. It is vital to understand how the process works. Underwriters are in essence referees who make sure that a mortgage conforms to a set of guidelines so that the investor will purchase the loan. The investor package loans into bundles that meet these specifications. This enables them to sell the mortgages, in bulk, to institutions and individuals who purchase mortgage backed securities. Those who purchase mortgage backed securities naturally want to know they are investing in a product where they can have a reasonable expectation of repayment.
While some of the standards such as down payment, debt to income, have been fairly constant, other components of the mortgage process have become more stringent. Examples of higher criteria would be credit score, type of property, and stability of income. An example of higher credit score requirements would be that while HUD may say a credit score of 580 is acceptable, most of the investors who buy mortgages want a minimum of 640 or they will not purchase the loan. When it comes to the property we see increased scrutiny on the condition, especially if unpermitted work is involved. If it is a condo it really starts to get fun. The status of the Home Owners Association (HOA) will be more closely examined than ever before. While the owner occupancy ratio for a condo project (defined as the number of owner occupants in a project versus the number of rental properties) has been a factor for a number of years, current standards for some types of mortgages call for a higher percentage of owner occupants. Another recent example of raising the bar is the number of owners within a project who are delinquent on their HOA dues. Stability of income, particularly for self employed borrowers, is another challenge. If a borrower's income has declined from 2009 to 2010, a reasonable question is will it keep declining? The response that the economy is down is typical, but it does not address the question.
What about the void created by borrowers who do not fit into the box for a conventional, FHA, or VA mortgage? A possible answer is portfolio loan products or "hard money" (also known as private money) loans. More on this next time.
Chip Allen
Crestline Mortgage Bankers
A Division of Universal Lending Corp
Direct: 303.947.2109
Fax: 303.987.0676
Loanchip@hotmail.com
Your Lender for Life!
When people you care about need a mortgage,
for purchase or refinance, please do not keep me a secret.
While some of the standards such as down payment, debt to income, have been fairly constant, other components of the mortgage process have become more stringent. Examples of higher criteria would be credit score, type of property, and stability of income. An example of higher credit score requirements would be that while HUD may say a credit score of 580 is acceptable, most of the investors who buy mortgages want a minimum of 640 or they will not purchase the loan. When it comes to the property we see increased scrutiny on the condition, especially if unpermitted work is involved. If it is a condo it really starts to get fun. The status of the Home Owners Association (HOA) will be more closely examined than ever before. While the owner occupancy ratio for a condo project (defined as the number of owner occupants in a project versus the number of rental properties) has been a factor for a number of years, current standards for some types of mortgages call for a higher percentage of owner occupants. Another recent example of raising the bar is the number of owners within a project who are delinquent on their HOA dues. Stability of income, particularly for self employed borrowers, is another challenge. If a borrower's income has declined from 2009 to 2010, a reasonable question is will it keep declining? The response that the economy is down is typical, but it does not address the question.
What about the void created by borrowers who do not fit into the box for a conventional, FHA, or VA mortgage? A possible answer is portfolio loan products or "hard money" (also known as private money) loans. More on this next time.
Chip Allen
Crestline Mortgage Bankers
A Division of Universal Lending Corp
Direct: 303.947.2109
Fax: 303.987.0676
Loanchip@hotmail.com
Your Lender for Life!
When people you care about need a mortgage,
for purchase or refinance, please do not keep me a secret.
Wednesday, August 3, 2011
Check out Denver Real Estate Weekly M...
Check out Denver Real Estate Weekly Market Update titled "The Foreclosures Are Not Coming!!!" at http://ow.ly/5UdcC
Check out Denver Real Estate Weekly M...
Check out Denver Real Estate Weekly Market Update titled "The Foreclosures Are Not Coming!!!" at http://ow.ly/5UdcC
Check out Denver Real Estate Weekly M...
Check out Denver Real Estate Weekly Market Update titled "The Foreclosures Are Not Coming!!!" at http://ow.ly/5UdcC
Tuesday, August 2, 2011
Check out my latest real estate colum...
Check out my latest real estate column titled "Going Above and Beyond" at http://ow.ly/5TcSb
Check out my latest real estate colum...
Check out my latest real estate column titled "Going Above and Beyond" at http://ow.ly/5TcSb
Going Above and Beyond. By Dan Polimino.
I had just begun to believe that customer service in this country was gone, dead, and buried. It seems that it's hard to find anyone these days that knows the meaning of customer service, let alone provide it. Then my entire faith in people changed one summer afternoon last month.
I was out showing a client from out of town some properties to buy when I got a flat tire around Southglenn mall. That is a Realtor's worst nightmare - a flat tire, a client in the car, and showings scheduled for the rest of the day. Trying to think quickly on what to do, I called my service rep at Groove Toyota, but he wasn't much help, nor did he provide me any suggestions or solutions. My goal was to figure out a way on how I could keep our showing appointments and not have to cancel the rest of the day for the client. I called my wife to see if I could get her car, but I could not get a hold of her. Finally, I thought that I would call my sales rep at Groove Toyota, Courtney Brower, who sold me the car (I have bought like eight cars through Courtney). By chance, I caught Courtney at his desk, told him my situation, and Courtney came to the rescue. He told me that he would drive up a loaner car to Southglenn Mall, which I could use for the rest of the day showing my client places, and he would take my car back to the dealership to get the tire fixed or replaced. Fifteen minutes later, Courtney was at the mall with brand new Toyota Sienna fully loaded. Not only was I impressed, but so was my client and in short, Courtney made me look good in the eyes of a new client that I had just met for the first time. Later, I returned the car to Toyota. I had to buy four new tires, but in the end there was no time spent on the problem or inconvenience. That is customer service above and beyond what is expected. That is not normal and people like Courtney that do those types of things earn undying loyalty from people like me.
The moral of today's story is...are you getting customer service "above and beyond?" If you are buying or selling a home, is your Realtor going the extra mile and doing things that not only blow you away, but are way beyond what you expected? If not, maybe you should be seeking those types of people. The Courtney Brower's of the world deserve your business.
Dan Polimino is a Realtor with Fuller Sotheby's International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost
I was out showing a client from out of town some properties to buy when I got a flat tire around Southglenn mall. That is a Realtor's worst nightmare - a flat tire, a client in the car, and showings scheduled for the rest of the day. Trying to think quickly on what to do, I called my service rep at Groove Toyota, but he wasn't much help, nor did he provide me any suggestions or solutions. My goal was to figure out a way on how I could keep our showing appointments and not have to cancel the rest of the day for the client. I called my wife to see if I could get her car, but I could not get a hold of her. Finally, I thought that I would call my sales rep at Groove Toyota, Courtney Brower, who sold me the car (I have bought like eight cars through Courtney). By chance, I caught Courtney at his desk, told him my situation, and Courtney came to the rescue. He told me that he would drive up a loaner car to Southglenn Mall, which I could use for the rest of the day showing my client places, and he would take my car back to the dealership to get the tire fixed or replaced. Fifteen minutes later, Courtney was at the mall with brand new Toyota Sienna fully loaded. Not only was I impressed, but so was my client and in short, Courtney made me look good in the eyes of a new client that I had just met for the first time. Later, I returned the car to Toyota. I had to buy four new tires, but in the end there was no time spent on the problem or inconvenience. That is customer service above and beyond what is expected. That is not normal and people like Courtney that do those types of things earn undying loyalty from people like me.
The moral of today's story is...are you getting customer service "above and beyond?" If you are buying or selling a home, is your Realtor going the extra mile and doing things that not only blow you away, but are way beyond what you expected? If not, maybe you should be seeking those types of people. The Courtney Brower's of the world deserve your business.
Dan Polimino is a Realtor with Fuller Sotheby's International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost
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