Twin Cities Real Estate News Let's talk about the Twin Cities Real Estate Market. I will post helpful links and answer questions about real estate or mortgages. I live and work in Minnesota, so some of my ideas may focus specifically on Minnesota real estate or mortgage regulations applicable to our state.
I recently received an email with links to three excellent sites for relocation information. These links will provide value regardless of where ever you are moving to. I framed the title of this entry with cities around Edina MN where I live. If you are moving to Minneapolis or St Paul or one of the 7 counties that make up the Twin Cities area and need more relocation assistance please reach out and I will be as helpful as I can. If you want to learn about the Twin Cities real estate market, visit my real estate site at http://www.MinneapolisStPaulHomes.com
The FHA 203 K streamline is back in our arsenal of mortgage programs. Until recently there was just one investor in town offering the 203K. That has changed. Out of necessity, there needs to be a program that will allow qualified borrowers to obtain financing for properties that need a little bit of work. Many of the bank owned foreclosures are in need of some repair work. The regular 203K (which allows for major rehab in exess of 35K) isn't something I have access to with the investors I work with. Trying to find that loan has proved to be impossible. It may exist for Minnesota properties, I just haven't run across it.
Rather than write out all the nuances of the FHA 203K streamline loan, I decided to create a power point. You can view the particulars of how the program works at:
One of the things we do in the Twin Cities is produce a mortgage and real estate show called Dollars & Sense. We've been producing the show for the past 5 years. While it doesn't bring in that much new business, it is a great way to stay in front of past customers-which of course are your best referral sources. Here are our two most recent recorded shows where we discuss the current lending environment and various mortgage loan programs. We cover 100% financing, combo loans, the new first time buyer tax credit, the 700 billion bail out bill, the best type of investment property to purchase today in our opinion, and we offer the viewer a way to get a copy of the book I wrote on investing in real estate entitled "Reality Based" Real Estate Investing. This book is delivered in PDF format as a series of chapters over a series of weeks.
I have purchased many different products from various internet "gurus" over the past 24 months. One of my favorites-and most affordable- is Marlon Sanders. He has learning modules that are progressive and give you the skills you need. Most are really inexpensive-$59-79. If you are looking for great product and great service-you should check him out:
Here is an article he just wrote and sent in email:
How To Cut Your Learning Curve By At Least 50%
(The Secret, Hidden Power of OMG Marketing That Saves You
Enormous Amounts Of Time, Money and Energy And Gets You
To Paydays 50% Faster -- And It Doesn't Even Cost You A
Dime)
By Marlon Sanders----
I hate learning curves.
Because they take time and cost money. Plus, they're a pain.
What do you have to create?
* Banner ads
* Sales letters
* Graphic design
* Affiliate site
* Web site
* Ebook cover
* Upsells
* Downsells
* Ezine ads
* Google ads
* Blogs
* Facebook sites
Would you rather find the success you're seeking in 6 months or 1
year?
Which do you prefer?
If you want to do it in 1/2 the time, if you want to be on the 6
month program and not the 1 year program, then I'm going to share
with you three simple rules to cut your learning curve by 50% or
more, speed your progress enormously and get you the results you
want many times faster.
Rule one: You Can't Create From A Vacuum
I'm a writer by trade.
And the hardest thing to do is to write from a vacuum. If you start
and have no input but expect to crank out output, you're in a
pickle.
That's why when you write or create, you build yourself a fodder
package.
This can be samples of other writings, quotes, materials, articles,
web sites you print, books, pages ripped out of books -- anything
that will prime your brain when you begin the creation process.
Rule Two: Always Have A Model
When I do consultations or the rare event where I critique items
for mmy customers, I notice a trend: Almost no one follows a proven
model.
They omit obvious factors used in almost every successful sales
letter, blog, banner ad, upsell, Google ad or creative you see
online.
This goes hand-in-hand with rule one. You can't create in a vacuum.
So build up a collection of sales letters and web sites you KNOW
work.
Then, when you go to create YOURS, make sure you incorporate all the
successful elements you see in the model or models.
I'm always taking screen caps of guarantees, headlines, page designs,
bullet points and order forms that I can use as examples on our next
project.
What you do is COMPARE what you're creating against your models,
your benchmarks, your examples in order to make sure that what you
create is up to speed.
I don't see a lot of people doing this.
What I see the vast majority of people doing is putting a small
amount of effort into the end result and not doing their homework.
Plain and simple: The people who succeed in this business do their
homework. Those who don't, don't.
But this isn't some arduous task.
You do it while sitting on the sofa watching TV and during
commercial breaks. You surf web sites and save good ones to your
hard drive. Or take a screen cap of the best elements.
Then you take your MODEL or MODELS and you print them out. Hang
out on a lawn chair or go down to your fav coffee shop and read over
them. Study them. Sink your teeth into the copy, the headline,
the psychology.
This is EASY work. It's actually fun. But it's extremely important.
Rule Three: Make A Side-By-Side Comparison
After you create whatever you have to create, whether it's a banner
ad, sales letter, graphic design, web site, ebook cover or anything
else, do a side-by-side comparison.
Literally print out your web site, sales letter, banner ads, ebook
covers or whatever else it is.
Compare YOURS to your model or models side-by-side.
Look at the length, the size, the colors, the balance.
Ask others to compare the two and tell you which they feel is most
effective.
I see people creating sales letters, web sites, designs, ebooks
and sales processes without doing their homework.
It's no huge secret which sales letters do really well online.
Grab yourself one of those and compare it to YOURS.
"But Marlon, my widget is different."
This is why I have my Ateam calls. You can do your best then show
it to me on an Ateam call and I'll give you quick feedback.
But short of that, do your searches on Google. Find other web sites
you know to be successful and compare YOUR creation with what you
see.
My message today is simple:
* Model success
* Do your homework
* Make side-by-side comparisons
Typically, when someone asks me to critique their sales letter, blog
or web site, I can tell in 10 seconds -- they didn't do their
homework.
They worked without a successful model in front of their face.
WRONG!
You get your models. You stick them in front of your face. You use
them as fodder for your creativity. You don't blatantly rip off.
But you make darned sure you include the successful elements and
components. And that there's a modicum of resemblance in a side-by-
side comparison.
If you don't do your research, you're totally ignoring the immense
amount of money and time others have spent getting a model that
works.
Real world is this: 9 out of 10 things you try don't work.
That's real world.
Anyone who tells you otherwise is blowing smoke up your ying yang.
So do YOU want to be the one who goes out and tries the 9 things
that don't work?
Why not find the 1 that DOES work then use it as a model.
Now, blatantly ripping people off can be illegal, is in bad taste
and is NOT what I'm referring to.
But modelling and emulating is good. Finding all the successful
components or elements in something and making sure you use them is
GOOD!
People ask me to critique sales letters that are about one tenth the
length of any successful sales letter you can find at a similar
price point.
And they wonder what I think.
It's simple: I think the person didn't do their homework.
Do your homework.
Model success.
You have something that is NOT working, NOT selling, NOT converting,
NOT putting bacon on the table?
Start out by comparing it to what you KNOW as a fact works.
That's a very good starting point.
Compare.
Find the differences.
Make changes.
Test again.
"Oh look! There are testimonials here! Oh look! The bonuses have
more than one sentence of illustration. Oh look! The bonuses have
illustrations.
Oh look! There's a certificate for the guarantee. Oh look! They
have 10X the raw number of bullet points I have!"
Oh look!
See, that's the power of comparison.
It's called "Oh look" marketing.
And it doesn't cost you a dime.
"OMG (Oh My Gosh) their headline has numbers an specifics in it and
mine doesn't! OMG, their banner has a numerical benefit and mine
doesn't. OMG, this super power web site has a sales letter that
prints out to 25 pages and mine prints out to TWO!"
OMG!
If you do this, you will at LEAST cut your learning curve by 50%.
That means you can hit pay dirt in 6 months instead of 1 year.
OMG, their sales letter has subheads and mine doesn't!
OMG, their sales letter has a deadline for acting today and mine
doesn't!
OMG!
See, all those OMG's save you an enormous amount of time learning
them on your own by trial and error.
You don't need to reinvent marketing.
Marketing has already been invented.
What you need to do is to have the smarts to learn from others who
have gone before you.
I'll also add that the best investment you make is in your own
education, learning from those who have gone before you, tried tons
of things, cut out the 90% that don't work and share the 10% that do
work.
Marlon Sanders
P.S. "OMG, this sales letter has a PS! OMG!"
-----------------------------------------------------------
Marlon Sanders is the author of "The Amazing Formula That
Sells Products Like Crazy."
Like many of the readers, you have had a grandparent, parent, or relative in the Military. Today we remember their service to others. My deceased Grandfathers flag is proudly displayed in our home. He didn't die in the service but served in WWII and is buried out at Fort Snelling along with my deceased father-in-law.
I wrote this over the weekend in response to the crisis that we are all facing. We need real solutions and we need them fast. I am sharing this with people throughout the media and within our state and national government. We, as Realtors, see solutions that others don't because we're in the trenches on a daily basis. In my opinion, the stimulus impact that occurs when a home is sold is quite possibly greater than if AIG or GM lives, dies or is bought out. Think about what happens when a home is sold-money moves throughout the economy. I believe I read somewhere that money moves 7 times. So the impact of a 100k sale is really 700K, once the dollars work their way through everyone directly and indirectly involved and benefiting from that money. So, helping homes move again, provides real long lasting stimulus that EVERYONE in society can benefit from. Please share these ideas with others. Post about, link back to it, forward it or write your own blog and improve upon them. Collectively we CAN get the word out. Rather than complain and be part of the problem, I challenge all of us to ACT NOW and be part of the solution! Help educate and inform people that have the ability to affect change. They only know what they know.
WE'RE ALL IN THIS TOGETHER-THINK OF THE POWER OF OUR COLLECTIVE EFFORTS-WE CAN MAKE A DIFFERENCE!
Open Letter Concerning The Crisis In The Markets-Real Estate, Mortgage, Securities
As someone who has worked in the financial industry since 1986, I feel I have a valid opinion from the perspective of a seasoned practitioner concerning the causes and remedies of the current financial crisis. I work in the real world with real people who have hopes and dreams. I’m in the marketplace dealing with individuals at ground zero every single day. I run three financial businesses concurrently. I am a real estate broker, a mortgage broker, and a financial planner. My career allows me to have great insight into both the problems and the possible solutions to the issues we face today within our complex economy. My hope is that through an understanding of the information presented herein that appropriate and meaningful legislation can be crafted for the betterment of all of society. It is with that goal in mind that I share this information with you today. I’m not a politician. That’s where I need your help.
The financial markets are in upheaval which is possibly leading us into either a recession or a depression. How do we overcome fear and get a REAL stimulus package in place? Are there solutions that are low cost and can be quickly implemented? The answer is a resounding “YES” “YES” “YES”!
Let’s look at five major issues and problems associated with them:
The current real estate market does not have enough buyers for the current housing inventory. There is a larger supply of homes than buyers to purchase them. Buyers are not motivated. Instead, they are waiting for prices to drop further. They see no end in sight and no reason to take action today. Cities are losing revenue on lower valuations and sellers can’t sell if they ultimately don’t have enough equity to make a move to their next home. We need to put a floor under the valuations of housing so that housing can move forward.
Loan options have been dramatically reduced. Unless you are a Veteran, there are few options for buyers who lack funds for a down payment. Credit worthy borrowers are unable to buy homes and are forced to remain as renters. Often a rent payment would be equal in cost to that of a mortgage payment. The key is transforming renters into homeowners.
There is no liquidity in the Jumbo loan market. There are a number of reasons for this. The Jumbo loan market pertains to loans that are larger than $417K. Currently, Jumbo loan underwriting requires borrowers to have larger down payments as well as undergo more stringent qualifying requirements. Larger loans also are charged higher interest rates. In years past, the additional interest rate cost was generally .375-.625% more than with a conforming loan. Conforming loans are loans that are $417K or less. In today’s lending environment, Jumbo loans have a much larger interest rate differential-upwards of 1-2% above conforming rates. This additional interest rate cost is dramatically reducing the demand for these loans and the housing at the upper end of the housing market. Because of this, we are experiencing an even larger drop in valuations associated with higher end home prices. The market values in this price bracket will continue to fall as fewer buyers will be able to qualify or even want to pay the higher interest rates.
Foreclosures with bankruptcies are increasing. This is occurring because of personal life circumstances and our economy. In many cases, tax laws are not conducive to either pursuing a short sale, selling for less than the mortgage value, or establishing mitigated payments to reduce mortgage debt. Current laws only benefit sellers engaging in a short sale under certain circumstances. From a tax perspective, doing a short sale may cause you to incur a tax liability on the amount of forgiven mortgage debt if you’ve refinanced your home or if the property in question is not your primary residence. Bankruptcy may be the only way to get out from the tax liability on this forgiven debt.
The stock market is increasingly volatile. Much of the volatility can be attributed to short selling and naked short selling in particular. Short selling involves selling shares that you don’t own, hoping to buy them back later at a lower price. You must borrow these shares in order to sell them short. Current law was changed about 18 months ago to allow you to sell shares short while the price of the stock was falling. This is analogous to throwing gas on a fire. Previously, the law allowed you to sell short only when the stock was moving upward. This is called the uptick rule. By removing the uptick requirement, you’ve unleashed the potential for abuse, as a stock could be sold short as it drops in price, driving it into the ground. Naked short selling involves selling shares that don’t even exist, thereby flooding the market with an inflated inventory of shares at the worst possible time, helping to drive prices lower by creating a huge influx of supply when there is no demand.
Now let’s address solutions to these problems outlined above:
We NEED to get more buyers into the housing market. HOW can this be done? Bring back seller funded down payment assistance. This allows the seller to provide a gift to a charity which can be equal to the amount of down payment and closing costs. This amount is then given to the buyer from the charity to use as a down payment. In essence the seller funds the buyer costs and the charity was the conduit or pass through entity that delivers the funds. This was extremely useful to borrower’s who could qualify for a loan but lacked the funds to make their purchase. This down payment program arrangement worked with FHA loans and WAS funding 40-50K home sales across the country monthly. When we need more buyers in the market, we never should have removed a program that was working and encouraging home ownership. It was eliminated October 1, 2008in the last housing reform act bill. Was the program perfect? NO. Could slightly different underwriting guidelines be put in place to make it better? YES. What is the cost to the tax payers? ZERO. Remember the down payment funds came from the seller’s equity. The solution involves fixing the down payment assistance program to make it better, not eliminating this extremely useful program.
There is a new law that provides a first time buyer tax credit that is repaid over 15 years. This credit expires in June of 2009. A solution would be to make the tax credit permanent. Consider making it better by removing the repayment feature if you stay longer in the home. The credit could be forgiven over time. This would be an enhancement. The cost to tax payer would be VERY LITTLE.
Bring back 100% financing. We have a model of success-called the VA loan. It has worked extremely well for Veterans since WWII. If you are credit worthy and don’t have a down payment or money for closing costs, you could still be able to make the monthly payment. The programs longevity provides us with a working model. The government could create a similar new loan program for everyone OR allow everyone the opportunity to qualify under VA guidelines. Don’t just limit eligibility to Veterans. The cost to implement this would be ZERO
Current underwriting guidelines make most people ineligible for a new mortgage loan after a bankruptcy or foreclosure. The current timeline is 1-4 years for a bankruptcy depending on the type of bankruptcy and the specific reason it occurred. The time line from a foreclosure is 2 years if you are a Veteran, otherwise it is generally 4-7 years before it is no longer an underwriting issue on conventional loans. Many of the people who have lost their home would like to be home owners again. By keeping these potential buyers out of the markets longer, the housing inventory will remain high and prices will remain low. Why not change the underwriting guidelines? Instead of 4-7 years, make it 2 years. You could add extra requirements for these borrowers such as tighter underwriting, requiring them to attend mandatory budget counseling classes. They must re-establish a pattern of responsible credit history. This change would bring many people who have been affected by this market back into being homeowners with a stake in our communities. The cost to implement this would be ZERO requiring only a change to the underwriting guidelines.
Another mortgage solution might involve the government providing a special tax credit or incentive to buy a foreclosed or short sale property. This would stimulate demand for these properties. Instead, when people hear about a bank foreclosure, they immediately sense an opportunity to steal a property and offer less. If we made these properties more desirable, by providing an associated tax credit, we would help shore up the values of foreclosed bank owned homes. This would reduce bank inventory quicker. It would also stop the free fall of values and help the non-distressed homeowners maintain their home equity. The COST would be very little. The exact dollar amount would depend upon the type of monetary incentive which would probably be best delivered through a tax credit to the buyer. Make foreclosure properties more desirable and their prices will firm up within the marketplace.
The government could also provide down payment and closing cost assistance as either tax credit or under an equity sharing arrangement. Again, the problem for many people is lack of funds not the lack of desire for home ownership. If a typical down payment is 3-10% of a homes purchase price, we could get a lot of homes in the hands of new home owners for very little money. Out of the $700 Billion and other stimulus packages, we ought to be able to find a few dollars for actually stimulating the economy at the ground level. Also, higher incentive amounts could be allocated to certain areas of the country or to communities’ within a state that are undergoing huge amounts of distress and experiencing spiraling devaluation.
Jumbo loans would be more affordable and desirable if the government was able to underwrite and purchase them under the same terms under which they buy conforming loans. A conforming loan is a conventional loan with a top limit of $417K. Since the government has basically bought the GSE (government sponsored entities) Fannie Mae and Freddie Mac, they can change the authorization limit on the value of the loans they wish to purchase as well as the underwriting guidelines. Increasing the dollar limit so as to include more Jumbo loans has been attempted to some degree in previous stimulus packages. The problem is that they haven’t gone far enough. If the government needs to insure loans over a certain dollar limit, so the rates drop, so be it. We need parity in rates across all mortgage products and a better streamlining of underwriting. I am calling for all loans to be underwritten and priced the same, regardless of loan size. Pricing based on credit and down payment should be the only variables that have an impact. Size of the loan should not matter. If we loosen the higher end home underwriting to mirror that of non jumbo loans, you will help maintain the valuation of larger homes and make them desirable once again. The lack of liquidity in higher end homes is having a very negative affect on values.
Debt forgiveness laws need to be changed. Forgiven debt shouldn’t be taxed. We need to have other options to work out debt rather than having bankruptcy as the only option to get out from the tax liability associated with both credit card and mortgage liability. The credit card industry is clamoring for this change. The credit card crisis is upon us. We need to get out in front of the problem. No longer can people refinance and use their home equity as a way to pay off their bills. If you incentivize people to work out their financial problems affordably, many will choose to work it out. If the only option you present, because of tax liability, is a bankruptcy and/or foreclosure, then they will choose that option. Increased foreclosures only compound our housing crisis. Cost is ZERO. Legislation may actually increase revenue as people pay something instead of nothing.
Allowing short selling to continue, without bringing back the uptick rule is unconscionable. In my opinion, elimination of the uptick rule was one of the major causes of our stock market meltdown. Bringing back the uptick rule and eliminating naked short selling will restore value and trust to the markets. Without both, you have all the ingredients for distortion and manipulation of stock prices. You need look no further than from the time the law was changed to the present for the proof. Unless we restore confidence to the investment marketplace, we risk a protracted and weakened capitalistic society. Investing in the markets is what helps create capital and jobs. Cost is ZERO. Bringing the uptick rule back and enforcing the short sale rules that are on the books dealing with these abuses will restore confidence in the markets.
These are my solutions to the major problems we are facing today. If you need clarification about any of the problems and solutions I’ve proposed I would welcome a phone call and the opportunity to discuss this with you further.
About 2 years ago I became an E-Pro. I think it was one of the most valuable training classes I've taken in my 23 years of being in real estate. One of the things they talked about was selecting a correct domain URL. Ideally, you want something in the .com extension because it has the greatest familiarity with the consumer. That being said, there are some unique opportunities for individuals living in certain states.
What I'm referring to are specific country TLD (top level domains) that correspond to various state abbreviations. For example, the following state abbreviations correspond to various countries-MN, MS, LA, MD, and SC. There is also CA, but that has some restrictions. Various country TLD's may carry restrictions on the use of their TLD. MN does not have any special restrictions. If you are a Realtor in one of the other states I've listed, consider grabbing some great real estate based URL's and either use them to do PPC, Mini site development or simply brand as your main site. You can find many different country TLD's at http://www.MNdomainNames.com - not just MN domains. All the country TLD's I just mentioned can be bought there.
Since I live and work in Minnesota, I obviously prefer the .MN In fact I not only use a number of them, I also have speculated in a number of names in other industries. I created a website to re-sell some of my .mn domains at http://www.BuyMNdomains.com Because very few people know about this or where they can be purchased inexpensively, there are a lot of great domains available that would cost millions if they were in a .com. My main RE/MAX website can be found at http://www.Selling.mn
Here is the press release announcing my site.http://www.prleap.com/pr/127691/ For the record, .MN is the extension assigned to Mongolia-NOT MInnesota Please read the press release for the full story.
This was our first foray into having a piece of software produced. It came out pretty nice. Feel free to grab the code from the site and embed a calculator in your blog or website. This widget is unique in that it includes a feed for either real estate or mortgage-you choose which feed you want based on the widget you choose to embed. Have fun with web 2.0!
(PRLEAP.COM) Twin Cities, Minnesota-Venture Development-Minnesota mortgage broker-has just launched a consumer friendly website offering visitors the chance to embed a fun and useful tool into their website or blog. This tool was developed in response to the common mortgage question "What is my mortgage payment?" Using this mortgage payment calculator, you can now find out. The site URL is http://www.MortgageWidgets.org. This little tool is called a "widget". The term "Widget" is defined by Wikepedia as "A widget is anything that can be embedded within a page of HTML, i.e. a web page. A widget adds some content to that web page that is not static." Our definition is a little simpler as we define widgets as "just plain fun." If you want to liven up a static webpage, consider adding a website widget. The best part about these calculators is that they are free! Simply copy the code and paste into your html editor. The script will take over and in seconds you will have your mortgage calculator on your webpage.
Venture Development, Minnesota mortgage broker, has created versions of a calculator widget which can be found at http://www.MortgageWidgets.org. What make their widget unique in the marketplace is that these widgets not only calculate a payment and amortization schedule, they also provide a news feed reader with real time mortgage or real estate news. This means the widgets are always adding value to the web user as they view a web page, even if they are not being used for a loan payment calculation.
There is yet another special feature. If a calculator user would like to learn more about various mortgage programs, begin an online loan application or get an interest rate quote for their home loan, they only need to click on the link embedded in the widget. The embedded link will redirect them back to the Minnesota mortgage company’s main website. If a webmaster or publisher prefers a website widget with breaking real estate news, they can select that specific script code for our real estate widget. The real estate web widget has a redirect link where widget users looking for information about Minnesota real estate can go to begin their online home search and learn more about homes in the Twin Cities real estate marketplace.
As a webmaster or publisher you have three choices on what you’d like to display. There is a mortgage payment calculator with a real estate news feed, a mortgage payment calculator with a mortgage news feed, or a series of different size banners offering the calculator that redirect back to the main widget site. The banners will
take up less space and redirect back to the main widget site where someone can then calculate a home loan payment. The banners are fun to view in and of themselves. Use a banner if you want to save space on your website or blog and still want to offer your visitors the chance to find out what a loan payment would be. Visit http://www.MortgageWidgets.org and get started today!
There will be a vote on the housing bill this week-FHA mortgage loan financing might be forever impacted. If you want to continue to use DPA-down payment assistance funding in it's current format, you NEED-MUST contact your congressman/woman today!
As Realtors, we know how the housing market works. The progression of home sales within the housing market is dependent on first time home buyers starting the domino affect. Their home purchases are the catalysts that allow people to sell their existing home and then move into a new property such as a larger home, condo or townhouse. In order to keep the housing market moving forward, we need to encourage homeownership at the beginning of the cycle. Mortgage programs that are underwritten with greater flexibility regarding credit, income and down payment will create more homeowners. We need mortgage loan programs that allow you to buy a home with as little money down as possible.
As recently as March of 2008, there were conventional loans that allowed for 100% financing such as the Home Possible, My Community, and 80/20 combination first and second mortgage programs. Declining property values coupled with high mortgage delinquencies in all real estate markets have all but eliminated investors for these types of high LTV loans. In addition, due to large losses by private mortgage insurance companies (PMI) there is an unwillingness of mortgage insurers to insure these loans. Hence these loan programs have either been eliminated or now require a down payment. With Fannie Mae and Freddie Mac's current financial problems and the overall state of the mortgage markets, don't expect that they will be creating any new high loan to value zero down mortgage products anytime soon.
Herein lies the problem. Most first time home buyers lack sufficient resources for the down payment and closing costs. They often have good credit and the ability to make a payment. Until they save enough money, they are left out the housing market. FHA loans currently allow buyers to obtain down payment assistance (DPA) from a relative or from a qualified down payment assistance provider. This means that buyers without enough current resources may be able to obtain enough funds to buy a home today. There are a number of approved down payment assistance providers-some of the largest names are Nehemiah, Genesis, and Ameridream. In a nutshell, these non-profit organizations issue down payment assistance to a prospective home buyer and then collect funds from the seller of a home who has agreed to participate in this program at the time of closing. The non-profit charities charge an administrative fee of between $300 and $500 to facilitate with the assistance of this funding. FHA sometimes refers to this arrangement as seller funded down payment-which they don't allow. Although the funding is coming from a non-profit, the FHA perception is that it is actually from the seller, albeit indirectly. The problem stems from losses. According to FHA, they have experienced larger losses on portfolios of loans that were funded with DPA funds.
In fact, FHA hopes to eliminate these programs altogether through the fast tracked housing bill going through congress now. Time is of the essence! The senate version-which is the supported version-will eliminate DPA. What would this mean? Let me make this clear-if this bill passes fewer houses will be sold. More qualified homeowners will remain as renters. More homes will stay on the market and the real estate and mortgage crisis will get worse. DPA funding offers a solution to our crisis by making homeownership possible. If there are problems with the way things are being done within the current DPA program then let's work on modifying them. Let's identify solutions-such as raising the minimum required credit score on DPA funded loans. This would probably lower the defaults and match the underwriting to the risk. Elimination or outright banning of DPA programs that are currently helping our ailing housing market is foolish. As a Minnesota FHA mortgage broker who works in the market on a daily basis, I can tell you about clients who are good people who want to become homeowners. Their shot at owning a home depends on these programs. Get involved and learn more. The consequences of making the wrong decision about the fate of DPA’s will affect our entire economy.
We are always searching for new ways to get involved in our communities and the people and businesses within. People do business with people they know and trust. How would you like to be the local expert and have fun at the same time? Why not visit your local businesses and profile them on your blog. You will give the local business some free advertising and you might become recognized as providing some value within the community. You will get to know your area better and meet more people, which should translate into more business. You will also be the first hand area expert.
You will be found with local key words in the area of town in which you work. At the same time, after you've reviewed or discussed the local business, you can feature your listings or market information about the local real estate market. Have you seen what the Minneapolis board of Realtors has available? Go to http://www.mplsrealtor.com/the100.aspx Type in any city you want. This is the kind of relavent information you need to share about your marketplace. These are the statistics people need to know when deciding to buy and sell homes. Share this information along side some of the area attributes and businesses.
Here is an example of what I mean. I live in Edina Minnesota-which is suburb of Minneapolis, MN. Being that it is a beautiful 4th of July, we went to one of our city lakes today for a walk. We have a local city lake called Lake Harriet which has a local community called Linden Hills. The lakes area is very popular and by default-so is Linden Hills. If you are interested, click to learn more about the Minneapolis Lakes.
Today, my wife and I visited a local coffee shop in Linden Hills called Coffee & Tea LTD. Their website can be found at http://www.coffeeandtealtd.com We tried their coffee a few weeks ago and absolutely fell in love with it. In fact, I encourage all of you to visit his website and see how he has incorporated video into his site. Video profiling your business might be something you want to do on your personal website. Besides traditional beans, Coffee & Tea Ltd has some very rare and exotic blends. In fact, he has a very rare and unusual bean. I don't want to spoil your surprise. Go visit his site and learn about it. He does sell coffee online and by mail order
This was our first video as we walked up to the store:
These videos are unedited and our first attempt at local video. Yet, we had a blast doing it. We are going to be doing more of this in the future. It's easy and fun. We used the Flip Video camera-which is small handheld camera and costs about $100. The camera couldn't be easier to use-point and click. It even has a built in USB connector.
During our visit with the owner, we discovered that he brings his dog with him to his shop. The dog was a beautiful Rhodesian Ridgeback. We discovered that he works on the rescue effort of placing these dogs in new homes. So, if any of you are interested, he mentioned he needs to place 18 of them in the coming months-so if you know of a good home-give him a call-612-920-6344. I went to Wikipedia and learned more about the breed. These dogs are actually used as lion dogs in Africa.
Here's my advice. Focus on local-provide value-be different. Many local realtors feature local listings-anyone of us can do that via an IDX feed. Very few Realtors feature short video of the areas, the people, and the amenities.
First time buyers often have little to no credit depth, lower credit scores and a limited amount of resources for the down payment and closing costs. FHA mortgages addresses each one these issues. Let’s start with credit depth. Often a first time buyer is younger and hasn’t had the time to establish the traditional trade lines that an older borrower may have such as repayment history of student loans, car payments, and credit cards. FHA underwriting guidelines allow for what we term “non traditional credit” to be used. Non traditional credit is where a person is obligated for repayment, but the repayment history isn’t necessarily reported on the credit report. Examples include rental payments to a landlord, cellular phone bills, utility bills like gas/electric and cable TV bills.
Credit scores are always important and used in underwriting loans. FHA allows for scores as low as 580. In certain circumstances, they may even go below this number with a file that warrants an exception if the file is manually underwritten. Today we are finding most conventional mortgage guidelines are requiring a 620 credit score or higher. FHA is moving towards risk based pricing. This means lower credit scores will have to pay a higher mortgage rate but the tradeoff is homeownership will still be possible. Another HUGE advantage of FHA is that they allow for a non occupying co-borrower to go on the loan and qualify with the borrower. Together, all borrowers become one for underwriting purposes. This means we take the income and credit of the co-borrower and combine it with that of the owner occupant borrower. We always default to the lower of the combined credit scores for underwriting. Imagine the possibilities of a self employed or non employed borrower combined with a much stronger co-borrower with a strong income.
Lastly, let’s address money for the down payment and closing costs. Currently, FHA 203B loans require borrowers to put 3% of their funds into the transaction. The minimum down payment is 2.25% and the other .75 percent would be for a contribution towards closing costs or escrows for the total of 3%. Here’s the good part-the 3% can be a gift from a relative or a qualified charity. Many of the down payment assistance providers (DPA) such as Nehemiah and Genesis are able to make the down payment a reality. The underwriting provisions regarding charity down payment providers are changing. I suggest you act quickly if you intend to explore that option.
Just this afternoon, I got a transaction accepted for a buyer using the Nehemiah gift program. It is really simple. My buyer would not have been able to buy the home if we didn't use this program.The website to learn more about Nehemiah is www.getdownpayment.com Another popular gift funds provider is Ameridream at www.Ameridream.com and another is Genesis at www.thegenesisprogram.org/buyers.cfm . There are others too-check with your preferred lender and see who is on their approved list of down payment assistance providers. We provide loans in Minnesota as a MN mortgage broker and use many different mortgage loan programs- www.ventureloanapp.com
Computer literacy is key to connecting with the first time buyers-they are younger and use the computer. Are you reaching them through your efforts? How this Minnesota Realtor had an Epiphany!
Approximately 18 months ago I sold 7 condominiums to various Twin Cities investors. We collectively agreed to share the responsibilities for showing the properties as well as splitting the costs for 7 weeks. Each investor client was assigned a designated week and duty for marketing. When advertising for prospective tenants, we did the following: classified ads in the Star Tribune, classified ads in the Pioneer Press, Classified ads in the Minnesota Daily, posted flyers at all available spots at the U of M, St Thomas, St Cathrine's and Augsburg, posted at the coffee shops bulletin boards, and posted an online ad at Craig's List.
Guess where all but one of the tenants were found? Craig's list. The one tenant that came from the Star Tribune was found by the tenants parents-they were searching for places for him as he was out of town relocating back to Minnesota after college. They still read the paper because they are of that generation. I confess, I am also of that generation and but I now forgo the local paper. Since college, I've read the Wall street Journal. I do so daily and wouldn't miss it. It goes extremely well with a hot cup of coffee and my cereal in the AM. BUT, I also get my daily news from sources such as Drudge Report and Breitbart.
From this rental experience, I became aware that I needed to learn the computer better. While I wasn't incompetent, I can always improve. I enrolled in the E-Pro course that Fall. If you are a Realtor and plan on staying a Realtor, you NEED to take this course. I'm not kidding. You will learn a ton. Also, one of your assignments will be to set up your blog at RealTown. I initially let blog remain semi dormant, then I started to get into it. My advice is just start. Did you know that Yahoo loves RealTown? Prove it to yourself-write a local blog post and check for the title key words. You will be in the top 20 almost for sure. From my own observation, it appears that Google likes Activerain and will index them more often than RealTown, but they still index RealTown too. I could be wrong, but that's what I think I've noticed. Anyway, the point is you need to hone your computer skills and you need to become an E-Pro.
Another resource that I've found that you might like comes at it from an internet marketing angle. Sometimes learning a topic from another angle will give you an edge in your business-such as real estate sales. There is a guy named Eric Holmlund at http://www.ericstips.com/ He has great little 15 minute video. I think his subscriber list is about 33K people. I think he's refreshing because he provide a lot of value and isn't trying to sell you something every five seconds. That isn't to say he won't have something to sell you in the future. From his most recent blog post and video, he offered these online learning resources for the basics:
Many of us have met with prospective buyers and people who are having financial difficulty. In today's stressed economic environment you don't have to look too far. Besides the obvious reasons, sometimes "life just happens." In times like these, you might want to collect information that could be useful to help people rebuild their lives and credit. Besides doing a public service, you might be building your future pipeline of business. We are our brothers keeper.
From a business perspective, who is going to be buying homes in the next 3-5 years? It is all the people who have just lost their existing home to foreclosure. Many want to be homeowners again. If you establish relationships and are helpful today, when they are creditworthy they will remember who helped them in their darkest hour.
Like a farmer, you need to plant your seeds before you can harvest your crop. I can guarantee you won't have much competition.
I have two resources that are E-books that I provide-You are welcome to click on the link and download a copy for yourself or anyone who can benefit from the information. Here are the links to the books and the outline of the content
•Define a credit score, a credit report, and other key financial terms
•Develop a personalized credit repair plan that addresses your unique financial situation
•Find the resources and people who can help you repair your credit score
•Repair your credit effectively using the very techniques used by credit repair experts
Plus, unlike many other books on the subject, this ebook will show you how to deal with your everyday life while repairing your credit. Your credit repair does not happen in a vacuum.
* Why an e-book or how-to guide on setting up a family budget?
* Why would or do you need a family budget?
* The business case for and rationale behind family budgeting
* Benefits and advantages of a family budget
Family Budgets Defined
* What is a family budget?
* What constitutes a good family budget?
* What should it contain and look like?
The Family Budget Process
* How to set up a family budget?
* Some practical suggestions and a step-by-step summary of a family budget process
* Hints, tips, tricks and tools for setting up a family budget
* How should a family budget be used?
You must educate yourself about mortgage financing options!!
FHA loans are available to individuals currently in a chapter 13 bankruptcy-this applies to purchases or refinancing. You have to have made the past 12 months of payments on time. This is unlike conventional loan products which require a minimum waiting period from the bankruptcy discharge date. How many borrowers have you met that either are in a chapter 13 BK or have just recently had one discharged? How many borrowers have been told buy their loan officer that they had to wait or accumulate more of a down payment before they could buy a home?
If you want to sell more homes, you need to know and learn about the financing. Don't rely on what on what one mortgage company may tell you. Many banks and mortgage brokers do not finance with FHA loans. The approval requirements are higher and not everyone can or wants to go through the process. As such, you may never hear about the FHA options. You need to at least explore FHA-the down payment requirement is only 2.25% on a purchase. Total buyer contributions must be 3%. BUT, the contributions can be from a gift-of which there are down payment assistance programs available that can provide the gift. I could write a book about all the cool things FHA can do. Go to hud.gov to learn more.
I have been selling homes in MInnesota since 1986-http://www.selling.mn and a Minnesota broker associate since 1988. I have been financing homes as a Minnesota mortgage broker since 1995-http://www.ventureloanapp.com I am able to structure transactions with the maximum number of options for the borrower and seller. Too often, buyers don't know what is available. The housing crisis can be resolved quicker with better eposure to the complete set of mortgage loan financing options.
Make sure whomever you select to provide the financing that they are experienced and knowledgable about loan product choices.
For one year ONLY-FHA Rules regarding the 90 day waiting period hae been lifted!
Problem: FHA wouldn't finance a home if it had been bought and sold withing 90 days. This discouraged rehabbers from buying into areas that might have been more conducive to FHA mortgage financing. Areas that would have been prime candidates for rehab were sometimes neglected. Property inventory would increase as investors chose to move to other areas or waited out the 90 days. During this waiting period the properties and areas could fall into dis-repair. REO properties are now more appealing to investors.
Solution: Using conventional financing was the solution in the PAST. Since March of 2008, with the new rules in conventional financing and declining market limitations FHA is becoming that loan of choice. Remember that FHA allow for lower down payment-2.25% and FHA loans allow for Down Payment Assistance from a qualified DPA provider. The low down payment and opportunity to use qualified gift funds makes mortgage financing possible for many people-first time buyers and otherwise.
Net result: Lenders and investors are now incentivized to rehab property quickly. This should stabilize neighborhoods as FHA financing will now be an option for buyers!
Visit http://www.selling.mn to begin to search for next home in Minnesota. Mortgage broker-Venture Development provides more information about FHA and an FHA video information- http://www.ventureloanapp.com
MGIC-one of the nation's leading underwriters and providers of private mortgage insurance has recently created a FREE online resource for consumers. What they've done is create two online classes that will provide buyer education for first time home buyers and budding landlords. You can login and take the class at your leisure. Once you complete the class and you pass a short test, you will receive a certificate of completion. This MAY be able to be used for mortgage programs that require buyer education prior to closing your home. For example, many of the grant and bond programs provided by various agencies have home buyer education as a condition of getting the loan.
Did I mention the cost?-It's free! This is what you need to do: go to http://www.MGIChome.com and look at the class. You can start it immediately. When you are ready to take the test, you will need the lender email login. Feel free to use ours-it is: learning@ventureloanapp.com
Here is a brief synopsis of the class that I've taken from the MGIC site:
So you’ve decided to make the leap and become a homeowner. Congratulations! You’ve come to the right place to prepare yourself for what lies ahead, to ensure that you go into the home-buying process with your eyes wide open.
As you complete each chapter, come back to the Landlord Education home page to review the Becoming a Landlord Test Tips.
When you've finished studying, come back to the Landlord Education home page to take the Becoming a Landlord Test.
If you are in Minnesota, please stop by my website at http://www.selling.mn You can begin your online search at this site. You will also find a TON of info in the side bar links. To get pre-approved for a Minnesota mortgage, visit http://www.ventureloanapp.com
Besides being a real estate broker of 23 years, I also own a Minnesota based mortgage brokerage in the Twin Cities with my wife. I've owned Venture Development since 1995-visit us online at http://www.VentureLoanApp.com Now, more than ever, you need to know how to help your buyer arrange their financing-whether it be a first time home buyer or a move up buyer.
Our latest episode of "Dollars & Sense" highlights some of the FHA loan products and how they can be used-FHA 203b, FHA 203K, FHA reverse mortgages, and FHA refinancing. Don't forget-FHA loans allow for DPA-Down payment assistance programs with such providers as Nehemiah and Genesis. 100% financing options are all but non-existant, down payment assistance from relatives or qualified charities will fill the gap.
Learning more about FHA and VA loans will help you sell more homes. Conventional underwriting is changing due to pull backs from the private mortgage companies and the guidelines from GSE(government sponsored entities) such as Fannie Mae and Freddie Mac. Declining market conditions and rising foreclosures are creating the tight and conservative lending environment in which we now must do business.
Minnesota has just passed a bill that is now in effect for tax year 2008. The KEY date is July 1st of 2008 to apply for the benefit. How would you like a permanent exclusion of your home's value from property taxation?
Here are the details:
The bill is the 2008 Omnibus Tax Bill passed by the Minnesota Legislature. Veterans who have a high enough disability rating will receive an exclusion of part of their valuation from taxation. If you apply in time, you can get the exclusion for 2008. Once your approved, it will continue into 2009 and beyond.
$150,000 of market value is excluded if you are a veteran with a service connected disability rated at 70% to 100%.
$300,000 of market value is excluded for a veteran with a service connected disability rated at 100% that it considered total and permanent.
You can contact the County Veterans Service officer at 1-888-Linkvet(546-5838) for more details.
If you go to http://www.taxes.state.mn.us and look at fact sheet #13 you will see the info and steps you need to take. The form you file with the assessor's office is CR-DVHE1
This is Memorial Day weekend-Let's all be greatful for the efforts of the veterans, for the freedoms we enjoy today are a result of their efforts. Thanks guys and gals!
You can go to www.yourGmap.com and create a link for free. It takes just a minute. This could be a great tool if you want to add directions to a listing, email, or website. I found it useful so I thought I'd share it with everyone.
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You can find great local Edina, Minnesota real estate information on Localism.com John Mazzara CFP CLU CHFC CEBS MBA MS CMB is a proud member of the ActiveRain Real Estate Network, a free online community to help real estate professionals grow their business.
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