TeamResults

A reverse mortgage is a way to borrow money against the equity in your home to provide you with tax-free income. You can receive funds in any number of ways including:

• Lump sum
• Regular monthly payments for as long as you live (or reside in your home)
• Monthly payments with a pre-determined cut off date
• A line of credit to draw on when you need it
• or a Combination of these

A reverse mortgage can enable you to enjoy retirement more, provide some financial cushioning for future emergencies or major expenses, while, allowing you to remain in your home and keep title to it. Being more complicated than a conventional mortgage, a reverse mortgage carries some pros & cons and has different qualifying requirements for borrowers. The most notable requirement is that the youngest borrower must be at least 62 years old when the loan closes.

Some other requirements are that the home must be your primary residents and remain so during the term of the loan, and that existing loans, or mortgages be paid off prior to closing on the Reverse Mortgage. (reverse mortgage funds can be used for this according to cash advance rules).

If you choose to, you can even pay off a reverse mortgage early by refinancing out, or just settling up with the lender. If you should pass away before the loan is paid, your heirs can choose to pay off the loan or sell the property, any proceeds above the loan amount of your home goes to your heirs.

applying for a reverse mortgage is easy, and you can start online. The National Reverse Lenders Association website is a good starting point to gather information from lenders. The URL is http://www.reversemortgage.org/ .

Team Results also has a 12 page pamphlet available that covers in detail all aspects of  reverse mortgages. We'll gladly mail a copy or e-mail an electronic version at your request. Send requests to TeamResults@Century21.com. Be sure to include your preferred delivery method.

There are various methods used to consummate a real estate transaction. In California, Escrow services are the preferred method. Strictly speaking escrow is an agreement between the parties that provides for the placement of instruments, and money be placed with a third party for safe keeping, pending fulfillment of the conditions of the contract.

Basically, a seller places his or her title or deed within escrow and the buyer, deposits money in escrow. The escrow agent is charged with ensuring that all conditions of the purchase agreement are met before the transaction is closed (deed to buyer, and money to seller). Escrow is one safeguard against ‘taking the money & running'.

In some cases when a title company is involved, the title company itself my act as an escrow agent. Escrow services cost money and the fees vary with differing escrow companies. Usually the fee is equally split between buyer & seller, but escrow fees are one of those negotiable monies in a real estate transaction so fees could be paid by any mutually agreed party..

© 2007, John Wall, All rights reserved.
John.Wall1@century21.com

Okay, so I'm going to give this a shot. I'm going to do a series on real estate topics aimed at educating consumers on the aspects of a real estate transaction that frequently go on in the background without much to do. I haven't yet determined whether to go A-Z or mix it up, but today I'm going to talk about Appraisal. I would love to hear from consumers, if you would like to see a specific topic or have a question that you would like addressed. Please Email me at John.Wall1@Century21.com.

An Appraisal is an opinion, an estimate of the value of property. Professional appraisers use one of three methods or appraisal approaches to find the estimated value of a particular property. They are; cost, income, and comparison.

The cost approach is a method used to estimate the value of a property based on the depreciated cost of replacement (buildings & land). In other words, what would it cost to replace a particular property?

The income approach is used to estimate the value of income producing property like a business or apartment building. Basically this methods takes the average capitalization rate (rate of return) for similar properties in the area and using a little trick called "math" divides that rate by the expected annual net income of the property in question.

The comparison approach, by far the most common used to estimate the value of residential property, and in my opinion, the most effective, takes into account the sales price of similar properties in the area. Making adjustments for slight differences in each comparable home (none are exactly the same), and appreciation or depreciation if the most recent sale has been some time in the past.

When Realtors present a CMA or "comps" for your home they generally have used the comparison approach to estimate your home's probable sale price. Keep in mind that a real estate agent's estimate is not the same as a professional real estate appraisal.

(c) 2007 John Wall, Realtor. all rights reserved. John.Wall1@century21.com

When making offers to purchase a home, any delay in your approval process could mean a lost deal. Here we've listed 5 Do's and 5 Dont's to help avoid delays in your loan approval.

Do's

1. Continue making mortgage or rent payments
2. Keep working at your current employer(s)
3. Continue living at your current residence
4. Use your credit as "Normal"
5. Stay current on all existing credit accounts

Dont's

1. Apply for new credit (even if pre-approved)
2. Change Bank Accounts
3. Open a new cell phone account
4. Close any credit accounts
5. Take out a new loan

Always consult your mortgage planner before making financial decisions while your loan approval is on the horizon. There are other simple things you should and should not do. We are happy to share them with you, just e-mail teamresults@century21.com or visit us at www.TeamResults21.com

With all the real estate information available to homeowners, its natural that some would decide to ‘go it alone' when selling their home. The primary advantage of selling without an agent is not having to pay the agent's commission.

In addition to any potential savings, a homeowner turned FSBO should consider the following in order to increase the chance of a successful sale. First and foremost, its not easy, and you should be prepared to get a little dirty and put in some long hours.

Before doing anything, the house needs to be in shape for showing. That means, making sure its clean and clear of clutter, isn't sporting any unpleasant odors, well lit, and freshly painted.

When the home is presentable, get the price right! visit local open houses to see what other similar homes are asking. Be sure you stick to the neighborhood, because often times, there can be significant price differences in neighboring market places. Sometimes even a few blocks away.

If your home is unique and difficult to compare to others. Hire an independent appraiser to set your starting price. Once you have your price set; its time to look at how much of a discount you're going to offer. The commission amount you might be saving is a good start. Buyers who make offers on "FSBO's" know that your saving some money and expect to receive the same if not more savings. Many buyers who go this rout are real estate savvy and will have the mind set that they know more than you, which they will take advantage of and try to get an even better deal.

Okay so know your pricing is all set and you've decided on your concessions. Its time to figure out who's going to do what. You need to put into place a loan officer, a title rep, an escrow company, and a lawyer or agent, to help with paperwork. Then find your Termite company & Natural hazards company. Make sure you have all documents ready to go when you open a transaction.

When marketing your property, you have many options. There are hundreds of websites that you can post your listing to. Any of them should do fine for market exposure. When placing your newspaper ads, make sure a free online posting is included. Many newspapers syndicate their online real estate ads with other companies and this increases your exposure.

The real estate sign hasn't lost its value either. Get that sign out front and tell your neighbors that your selling. (they may know someone who will buy it) Directional signs and open house signs will also drive traffic to your home.

When scheduling appointments to show the house... Use some common sense, security measures. Don't show it alone, don't leave strangers unattended in your home, and don't leave valuables out.

These are things that are simple to do, but will greatly increase your chances of a successful sale if done right. For more information or a private, NO OBLIGATION, consultation, please feel free to contact me or visit www.teamresults21.com.

Business Week televised a couple of good items about the real estate industry as a whole yesterday. Their video can be seen here: http://feedroom.businessweek.com/index.jsp?fr_story=1164424c0c16afd06ab22f7edc11e1b8de2f5ab5 I've pulled information from other current videos as well.

Some of the bullet points I thought were important are:

Buyers still have an edge in real estate.

Seller's are becoming more flexible and responsive to buyers' terms. It was specifically pointed out that buyer's who low-balling the selling price won't produce the desired result and indicated that 10% below asking was a reasonable price reduction to request.

Seller's can increase their returns by upgrading with environmentally friendly improvements. Shown by the trend in eco-friendly home buyers.

Sellers were directed to post at least 6 high-quality photos (recommended by Realtor.com) because 80% of home buyer's check out listings online before touring in person.

Buyer's too have some work to do like; giving a boost to their credit score, and finding the best deal (budget friendly) on a mortgage.

Mike Mandel, Business Week Economist, talked about the economy as a whole & the real estate market's effect on it. He says there are factors other than the mortgage market that consumers should be keeping an eye on.

Mike pointed out that 30 year fixed rates are actually lower than they were a year ago and that borrower's who have an adjustable rate mortgage, and decent credit will have little trouble re-financing into a fixed rate and will be "sitting pretty".

As a whole the mortgage market is doing just fine, though the sub-prime market is in a bit of trouble. The market will no doubt affect the economy but won't cause a recession according to Mandel. One of the more important aspects to watch closely is business investment which he says have slowed and is at very low levels.

Also the increase in foreclosure activity was localized to areas that didn't have strong real estate markets in the first place.

I've been asked before why I spend so much time looking at economic forecasts, reviews, and ‘expert' opinions (I even subscribe to the Dept. of Labor's CPI summary). My short answer is that; consumers are doing the same thing. Often they're hearing conflicting stories, or worse, stories that just aren't true. Being able to answer their concerns, with an open mind and various points of view, shows a level of professionalism and confidence in the industry in which we practice (regardless of the current state).  Many consumers are on information overload, and become easily confused, & thereby unable to make a decision one-way or the other. Being able to sort it out for them, sets them at ease and facilitates fact based, regret free decision making.

I know...  I said that was my "short answer". You should see the long version.

I'm interested in hearing your comments, especially from the mortgage industry, and agents in the field as well as consumers themselves.

On Wednesday night around 9:30, a unit in the Galaxy Tower's caught fire which claimed the life of a 60 year old man who faced the decision of jumping from an 18th story balcony or burning to death as he screamed for help.

The full details of the incident can be viewed on LAtimes.com, Presstelegram.com, or any of the Los Angeles Television Network websites. This story is close to me because I live next door to the Galaxy towers and my family were ordered out by police, and fire officials because of flaming debris falling in our yard and on our rooftop. I'm glad to say we're all okay, but the reason I felt the need to post this was, because, at the moment we were ordered out, chaos struck, our "disaster plan" didn't fall into place and we scrambled to gather everyone together along with pets, litterally tossing them into cars and taking off as quickly as possible.

As time went on and the emergency declined; I began thinking... Did I change the batteries on the smoke detectors? when was the last time the alarm was tested? Why couldn't I find my car keys? Along with a million other "why's", "what-ifs", and "where is" questions. The truth is none of us can truely be prepared for everything, but by taking simple steps, we can be as prepared as possible.

I'd like to remind everyone, not to wait any longer, get a plan, get supplies, and get to work. Tragic events like these happen too frequently, and we can limit them by staying on top of our emergency prepardness.

Check your smoke detectors, make sure you have plenty of fire extinguishers, and keep emergency supplies handy and near the exits so you can "grab-n-go". If you have pets, keep leashes, and carriers nearby also. And while your at it, make sure you know where your keys are.

Thank you.

A long awaited law makes PMI (private mortgage insurance) deductible on homeowner's taxes. Homes that are purchased or have been refinanced in 2007 are eligible for this deduction.

PMI is an insurance policy on most home loans that carry less than 80% LTV (loan-to-value). The policy covers the lender against loss in the even of borrower default.

Many homeowners consider PMI to be frivolous and excessive; of course anything that increases housing cost doesn't exactly instill a warm, fuzzy feeling in those paying them. This new deduction at the least softens the blow for many.

Also, as a reminder - Most PMI can be cancelled when LTV hits that magic 80% mark. Usually all it takes is a phone call or a letter in order to cancel this coverage (if the borrower is paying the premium), but there are cases where it might be more difficult.

If your home is financed under an FHA mortgage, you may mistakenly believe that you are paying for PMI. The insurance coverage on a government loan is a whole different animal and has a different set of rules. For more information on that, please feel free to e-mail TeamResults@Century21.com, I'll be happy to provide any information I can.

If you haven't done your taxes yet, see my post on that here.

John Wall
CENTURY 21 Results

This post is for information purposes only and should not be relied upon in any financial / or tax planning decisions. Always seek the advice of a qualified expert.

My team and I are working on a new website. www.teamresults21.com, Still in the planning stages - we hope to make it the online source for Long Beach real estate. Most agents have personal web pages, and in this day and age having one is essential to staying in business. I've had websites and web pages since the days of per minute dial up access charges, and from those ventures, I've learned a few things.

So here's what we're doing...

Keeping it simple.

Having dynamic and current content.

Keeping communication easy, fast, and effective.

soon our clients will be able to log in, and view their transaction documents, print forms, sign documents and FAX them back into the system. So check it out, let me know what you think, and if you'd like to see something special... tell me that too.

 Thanks,

John

The Los Angeles Times reported today that new home sales has declined nationally, but, California showed strength.

The article cites buyer's response to builder's discounts and incentives to be the source of California's new home sales strength overall. Reported national sales figures were down 18.3% and showed western state's new home sales up 24.6%. (California's figures included with ‘western states'.)

Orange county showed the second highest gains at 16% for California and Sacramento took the number one spot at 37% increase.

So come on builders, bring your bulldozers and lets sell some homes. Even if it does take a few years to get past the EIR stage. J

TeamResults@Century21.com
John Wall, Residential & Investment Properties
Long Beach, CA. (562) 433-1914