Federal Housing Bill Leads to a Higher Standard of Real Estate Appraisals

President George Bush recently signed a comprehensive bill into law in an effort to halt the rising number of home foreclosures. In addition to several large housing-related initiatives, the bill contains provisions that reinforce the importance of competent real estate appraisals to the mortgage lending process.

The part of the bill that pertains to appraisers is the Federal Housing Finance Regulatory Reform Act, H.R. 3221. The act amends the FHA Appraiser Roster requirements by requiring certification by a state or "a nationally-recognized professional appraisal organization" as well as "demonstrate verifiable education in FHA appraisal requirements."

H.R. 3221 is welcomed by the Appraisal Institute, as it promotes the use of highly- qualified real estate appraisers to address today's valuation issues. Bill Garber, Director of Government and External Affairs for the Appraisal Institute, says that, "Our organization believes that quality valuations performed by competent and ethical appraisers are an essential part of government guaranteed loans and we're delighted that Congress has taken steps to ensure the government's lending policies are safeguarded."

Most importantly, the bill prevents other people interested in real estate transactions -- from lenders to bankers -- from trying to influence appraisers. This provision protects appraisers working under the Hope for Homeowners Program and the FHA Appraiser Roster.

The Hope for Homeowners Act came to fruition under H.R. 3221. It is a voluntary program that allows homeowners facing foreclosure to refinance into a more affordable, secure FHA-backed mortgage. It requires that all appraisals done under this program be conducted in accordance to Title XI of FIRREA and performed by an appraiser who meets the competency requirements of the Uniform Standards of Professional Appraisal Practice.

"This is the first step in working to make appraisal standards uniform across the nation," Senator Mel Martinez, R-Fla, said. "This provision strengthens standards for FHA appraisals and ensures the integrity of the new FHA program that offers foreclosure assistance."

Labels: Federal Housing Finance Regulatory Reform Act, Home Foreclosure, Real Estate, Real Estate Appraisers

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Good News Thanks to Fannie Mae

Agents have a new way to beat housing market challenges, while buyers and homeowners alike have a good reason to smile. Fannie Mae, the nation's largest source of financing for home mortgages, announced in May of 2008 four positive changes to their policies and procedures.

Changes:

1. Homeowners can now refinance up to 120% of their home value as long as they are paying their mortgage on time.

2. Fannie Mae will buy jumbo-conforming loans for the same price they purchase other conforming loans through the end of the year.

3. Partnerships with state Housing Finance Agencies are being expanded. This will provide $10 billion in financing for qualified first-time home buyers.

4. A partnership with the Self-Help Credit Union will help qualified families get into foreclosed properties via a rent-to-own program. The program will focus on communities where the real estate markets were hit hardest.

Fannie Mai mortgages are available through a nationwide network of lender partners. Choose the best lender for your needs by checking out Fannie Mae's "Find a Lender Search" on www.fanniemai.com.


By Danielle Macklin, Allied Schools, www.realestatelicense.com

Labels: foreclosure, Real Estate, Real Estate Agent

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Are the Home Association Fees Worth It?

Get a real estate license and you'll help clients avoid home buying pitfalls like moving into a community with a questionable HOA. Here's how to determine if their dream home is in a dream neighborhood.

Visit the HOA Office

Meet with a representative from the office and learn about what the HOA fees include. Also ask about the rules. For example, some communities don't allow cars to park on the street. If your clients have frequent visitors or if they have a large truck that doesn't fit in a garage, living in a community with strict HOA rules may not fit their lifestyle.

Review the HOA Budget

How are the HOA board members spending the community's money? Are they buying chairs for the community pool area when the landscaping needs dire attention? Overall, you want to make sure the board members aren't spending more money than their taking in. If they are, your clients can bet on an HOA fee increase in the near future.

Check the Meeting Minutes

Sit down with your clients and carefully review the HOA meeting minutes from the last six months to a year. It's a great way to see what's really going on.

Get a Disclosure Statement

Your buyer's disclosure statement should outline each HOA fee. It should also mention any special projects planned for the next year or two that will lead to an HOA fee increase.

Way the Options

If your clients find out the HOA fees will significantly increase, point out the positives. For example, an HOA will deal with a sloppy neighbor, and if the board members are making smart decisions, an attractive neighborhood could lead to a quick home sale in the future.

By Danielle Macklin, Allied Schools, www.realestatelicense.com

Labels: California real estate license, Real Estate, real estate license

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Help Your Clients Choose the Best Lender

Once you complete your real estate license course, you should be prepared to help clients avoid typical buyer pitfalls. This includes choosing the wrong lender.

For example, let's say your buyers received three offer letters from three different lenders. Now they want your opinion. Should they go with the lender offering the most appealing interest rate? Maybe not. Before your buyers place their trust in any lender, do a little investigative work first.

Different circumstances require different lenders

Just because a lender touts a widely known reputation doesn't mean it's the best fit for your client's circumstances. There are lenders who specialize in working with first time buyers, buyers with small down payments or poor credit and more. Working with a lender who has expertise in your buyer's situation could improve their experience and possibly lead to a more reasonable interest rate.

More choices are always better

There's a huge variety of loan options out there, so your buyer's lender should offer an array of choices as well. From the classic fixed-rate loan to jumbo loans and option ARMS, a good lender will match your buyer with a mortgage that compliments their financial status and risk level.

Analyze fees too

Most potential homebuyers become consumed with the hunt of finding the lowest interest rate. But are there extra fees associated with the loan offering that too-good-to-be-true rate? Be smart and request a "good faith estimate" from your client's potential lender. This estimate should provide an overview of all costs associated with the entire term of their loan. Make sure to also ask the lender about other potential fees, like penalties or locking in a rate. Overall, you want your clients to feel confident when choosing a lender. If you feel they're omitting important information, encourage your buyers to move on.

Customer service with a smile

Is the lender paying attention? If your buyers request a 30-year fixed rate and the lender pushes something else, than beware. There's nothing wrong with making other recommendations, but the lender should immediately address your request as well. Additionally, the lender should provide your clients with answers to their questions in a manner that is helpful, informative and patient. If they rush them out the door at that time, don't expect the lender's responsiveness to get any better later down the road.

Get referrals

Ask family, friends and co-workers if they've had any good - or bad - experiences with lenders. Pay attention and even take notes if you have to. It's also a good idea to check out the web, as it's a popular sounding board for upset individuals ready to share their stories with the world.

More than likely, your buyers will appreciate your lender expertise and help you defy market challenges by referring you on to their own personal network.

By Danielle Macklin, Allied Schools,www.realestatelicense.com

Labels: Accredited Real Estate School, Real Estate, real estate license course

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The Housing Market: A Good or Bad Time to Buy?

Consumer confidence plays a defining role in the housing market. If consumer confidence wanes, the housing market experiences a downturn. If consumer confidence soars, the same market experiences an upswing in sales. As a consumer, it's important to follow the economic changes in our country because these changes can affect your own bottom line.

So, where are we now? You've heard about the good, the bad and the ugly for the past year. The housing market was on a major upswing for five straight years and then hit a snag last April when gas prices soared and interest rates increased. We heard about "bubbles" bursting in the West, a slowdown in the South, and over-inflated prices.

As a buyer, what are you to do? Do you wait or do you buy that house? There's good news on the horizon for 2007. The U.S. economy ended 2006 with a hopeful set of reports that showed consumer confidence soared in December. These reports also predicted that the worst of the downturn in the housing market might be behind us.

Consumer confidence rose to an eight-month high in December and was comparable to last April when it hit the highest point in four years. The National Association of Realtors reported that sales of existing as well as new homes actually rose in October and November, with the first back-to-back increase since spring. This is predicted to be a turnaround in the housing market. Prices are expected to continue to fall for several more months. It will continue to be commonplace for sellers to lower their asking prices to attract buyers for their homes. Buyers will have an advantage with low interest rates and more reasonable home prices.

Bottom line: Buy the house you've been looking at. The market has shifted from a seller's to a buyer's market.

Labels: Real Estate, Real Estate Agent

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Protect Yourself -- Get a Home Warranty

If you're in the process of buying or selling a home, you should consider including a home warranty. A home warranty covers the repair and replacement costs for appliances and other systems that break down in the home. It can be purchased by either a home buyer or current homeowner, and is often paid for at closing.

How it helps sellers?

A home warranty makes a seller's home more attractive to potential buyers, especially if the home includes appliances and other items that are older. A warranty might give the seller an advantage over another home that is similarly priced and desirable to the buyer. A warranty can assure the buyer that they will be covered if something stops working after the closing. The price of a home warranty is minimal. Typically the warranty is paid for at closing so the sellers will not have to pay anything out-of-pocket until the home sells.

How it helps buyers?

A home warranty can give buyers peace of mind. These individuals have just made a major purchase and oftentimes are strapped for cash. Facing unexpected repairs down the road can be a burden. A warranty can alleviate that worry. Oftentimes a seller will include the warranty as part of the purchase price; or the buyer can get one on their own. Or, they can arrange to split the cost with the seller. A home warranty can help protect the buyers from the costs of major repairs.

Facts about Home Warranties?

Most home warranty policies are effective for one year from the date of purchase. They come with an option to renew coverage upon expiration, but be aware that the renewal cost is often higher than the fee paid for the initial policy. Standard coverage can differ quite a bit by provider, so do your homework. Many standard home warranties cover plumbing, appliances, and heating and cooling systems. Some policies will also cover the roof. Typically you will have to buy extra coverage for high ticket items, such as private wells and septic systems.

Labels: home buyer, home warranty, Real Estate, seller

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Job Outlook: The Real Estate Industry

The real estate industry is projected to experience an INCREASE in employment opportunities over the next decade.

A growing population is expected to have a greater housing need. With a robust economy, individuals will perceive real estate as a good investment. They will be more likely to buy a new house, or invest money into a secondary residence. This will result in a greater need for agents and brokers. Low interest rates will also continue to spur market activity.

Because real estate is relatively easy to enter, more people will choose to start a career in this field. Flexible work hours and high earnings potential will draw them to this profession. Individuals with a high knowledge of the real estate market, as well as contacts in their local community, will have the best chance for success.

Bureau of Labor Statistics

Labels: California real estate, job outlook, Real Estate

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