Friday, October 30, 2015

First Choice Title & Escrow Services - October Newsletter

 





The 4 Biggest Home-buyer Turnoffs

There was a time that homes would sell within several hours with very little effort. These days and in most markets, it takes hard work to get your home SOLD. Even the most meticulously maintained home will require some preparation before listing it. A ton of money doesn’t necessarily need to be spent, but there are a few things to be cognizant of that may turn a potential buyer away. Below are some of the biggest home buyer turnoffs and ways to address them.

1. The most common criticism of a home that buyers will proclaim is that the home feels too “dated.” There are several variables that make a home feel this way. Even if your home was built in the 1970’s, it shouldn’t feel that it stayed in the 70’s. Wallpaper, light fixtures, kitchen counter-tops, and more are the most common tell tales. Furniture also can make the home feel older than it might actually be. As a seller, it may be wise to strip the wallpaper and update the light fixtures. Older furniture can also be swapped out or put in storage.

2. Another common buyer turnoff is the lack of space or rather abundance of clutter. The longer you’ve lived in a home, the more natural it is to have accumulated “things,” along the way. My four bedroom home once started out with only a master bedroom and a guest room filled with furniture. I now have a master bedroom, guest room with an additional desk and armchair, a nursery complete with twin bed, dresser, arm chair, and changing table, and a home office with desk, child’s kitchen set, a random dresser, and yet another arm chair. The more filled your home is with extra furniture and “stuff,” the more the typical buyer will lose interest. I always recommend to sellers to thin out their homes and either put stuff in storage or get rid of things. If you’re not going to move it into the new house; move it, sell it, donate it, or trash it!

3. Some buyers won’t even want to step foot into a home that looks or feels dirty. A buyer’s evaluation of “dirtiness” starts on the outside as soon as they begin their approach to the home. It could be equated to how the yard is maintained, the home’s siding, wood trim, and then carry inward to the home.
The inconvenient part of selling is that a showing can be sprung on you with just a moment’s notice. It’s important to have clothes in the hamper, dishes washed, and daily toiletries hidden. When your home is for sale it needs to look the best and cleanest that it’s ever looked!

4. One of the last biggest turnoffs for a home-buyer is concerning odors. Purchasers tend to have a keen sense of smell when they first walk into a home. Psychological studies would show that smell, more so than any other senses, have a strong correlation to one’s memory. A bad smell can immediately recall negative memories. Or a smell that the seller has become accustomed to can simply be repulsive to somebody else. Many of today’s buyers have significant allergies to dogs, cats, smoke, and other items around the home. The odor of the house may immediately turn away a prospective buyer. If you have older carpet (or furniture) that carries a smell, replace it with new. If you have newer carpet, at least get it shampooed and cleaned. Also consideration for some sort of HVAC air clean out to circulate fresh air may be wise. Candles and incense won’t mask the smells so look for options to clean or replace instead.
When your house is listed for sale, it’ll be put under a microscope. People will scrutinize every inch of the home. Knowing some of the most common turn offs for an average home-buyer will better equip your home to compete with all the other homes on the market. These are just a few of the common ones that can easily be rectified with minimal expense. Take a careful look at your home and/or request the services of a professional to help evaluate conditions. Feel free to share some of your biggest turn offs in the comments below.

By Tommy Sibiga on Homes.com


Thursday, October 29, 2015

New Home Closing Rules Take Effect This October


Closing on your new home is an exciting time — but it also can be an overwhelming process. Home buyers are usually required to sign a seemingly endless pile of documents, most of which are written in terminology not used outside of the housing industry and that can be complicated to understand.

Fortunately, the process is about to get easier. 

Under new rules required by the Consumer Financial Protection Bureau, four closing documents will be merged into two. The CFPB recently announced that the changes scheduled to take effect on Aug. 1 will be delayed until Oct. 3

The Good Faith Estimate and Truth in Lending disclosures will be eliminated and combined into a new single Loan Estimate form. The Loan Estimate must be delivered to the buyer no later than three business days after receiving the application.

In addition, the final Truth in Lending Disclosure and HUD-1 Settlement Statement are being replaced by the Closing Disclosure form. This form must be provided to the consumer a full three days prior to the closing, and if there are changes during that 72-hour period, the closing could be delayed.

This is a big change from the current process that allows the HUD-1 Settlement Statement to be presented to the buyer as late as the day of closing and allows changes to be made to the statement during the loan closing.

These new rules are intended to streamline the loan application process and make it easier for consumers to understand by clearly spelling out the most relevant details all on one page – the interest rate of the mortgage loan, the amount of the monthly payments and a listing of all the closing costs.

For consumers applying for adjustable rate mortgages, the documents will explain how their interest rate and future monthly payments could change based on certain factors.

Article By NAHB.org
Courtesy of First Choice Title Services & Escrow, Inc.



First Choice Title Services & Escrow, Inc
3 SW 129th Avenue, Suite 202
Pembroke Pines, FL 33027
Phone (954) 433-7680
Fax (954) 433-7355maria@firstchoicetitleservices.com






Thursday, October 22, 2015

Waiting on the Boomerang


Return or boomerang buyers have grown in numbers in recent years. Forecasts indicate that these former homeowners who experienced a foreclosure or short sale will return to the market in greater volume in the years ahead. However, lack of knowledge about special financing programs or lender overlays are hampering this group’s return.

Several factors could hinder a boomerang buyer’s ability to purchase another home including an impared credit score, a weak job situation, or a family matter. Mandatory waiting periods for financing through the FHA, VA, or the GSEs also impact return buyers. As depicted below, the FHA, VA, and GSEs restrict acces to credit following a foreclosure for a minimum of 3, 2 or 7 years (bottom left), respectively, though the GSEs are more lenient for a short sale.


However, if the consumer can prove that they lost their home due to a decline of income, loss of employment or some family situations they may be eligible for the extenuating circumstances criteria. Consumers eligible for this program may be be able to attain financing in as little as a year through the FHA or VA programs (above right).


The chart above depicts the distribution of years in which the foreclosures or short sales took place for return buyers who purchased their subsequent home in 2014.[1] The data is also displayed by the type of financing used. Because each financing program has a standard and extenuating circumstances option, one would expect to find two concentrations of buyers in each distribution: one around[2] the standard time frame and another near the extenuating circumstances opportunity. This two-hump or bicameral pattern is evident in the conventional (green), but not for the VA (red) and FHA (blue). The difference in timing for the VA program is minimal and may result in the single hump. However, there is only one peak in the FHA’s distribution as well and it is higher or more concentrated than the other two distributions. Furthermore this point is four years prior to 2014, suggesting that the bulk of return buyers who use the FHA’s program are waiting three years and not taking advantage of the shorter extenuating circumstances option. Likewise, the VA distribution is most concentrated three years prior to re-purchase, aligning with the two year wait under the VA’s standard foreclosure definition.

There are four potential reasons for borrowers not taking advantage of the shorter waiting period of the extenuating circumstances program at the VA and FHA:
  • Consumers are not aware of the program,
  • FHA and VA customers do not qualify for the extenuating circumstances,
  • Lenders are not aware or do not offer the program, or
  • Overlays are having an impact on this group’s ability to credit qualify for the program
Unfortunately, we cannot measure consumers’ awareness of the FHA’s program from this survey nor can we measure these consumers’ credit scores. Survey work by the FHA indicates that the majority of former homeowners who were financed by the FHA and experienced a foreclosure or short sale would have qualified for extenuating circumstances[3], but this does not necessarily imply that they would choose FHA financing again as pricing was higher for the FHA than conventional in 2014. However, these consumers’ initial choice of FHA suggests that they are either credit, capital or capacity constrained and would likely choose this program again. Finally, a review of several lenders’ product offerings suggests that many lenders do not offer the shorter option[4] for FHA and VA products. Furthermore, because this group’s credit scores are impacted by distress sales which can take years to recover[5], well documented credit overlays[6] on FHA production could be having a disproportionate impact. While not definitive, the latter two issues may be constraining this group.

From 2006 to 2014 nearly 9.3 million homes were foreclosure on or short sold. Homebuyers who experienced a short sale or foreclosure are returning to the market in growing numbers and will continue to do so over the next decade. While financing channels have expanded to provide opportunities for these potential return buyers, limitations persist.


[1] Special thanks to Brandi Snowden for preparing these cut of the 2014 Profile of Home Buyers and Sellers
[2] Ability to recover credit score and build down payment as well as the blend of foreclosures and short sellers may spread re-entry around these points.
[3] This may be different for owners who used VA or conventional financing on their initial purchase
[4] See Scotsman Guide’s FHA/VA/Government matrix for September or October of 2015
[5] For additional details on time to recover credit scores see http://economistsoutlook.blogs.realtor.org/2015/04/17/return-buyers-many-already-here-many-more-to-come/
[6] http://www.urban.org/research/publication/opening-credit-box/view/full_report

Article By Ken Fears on Realtor.org
Courtesy of First Choice Title Services & Escrow, Inc.


First Choice Title Services & Escrow, Inc
3 SW 129th Avenue, Suite 202
Pembroke Pines, FL 33027
Phone (954) 433-7680
Fax (954) 433-7355

http://www.firstchoicetitleservices.com/