Buy a House Fast

When housing prices collapsed, may people– in fact at least 25% of Americans – suddenly found themselves with mortgages that exceeded the current value of their home. This has been especially true when people bought with little money down and have no equity in their home.  As noted in previous blogs, this has encouraged some homeowners to walk away from their homes because they couldn’t pay and for others to strategically default because they didn’t think it was fair they had to.  The underlying assumption is that people bought a home they couldn’t afford.

So other taxpayers griped, “Why should they get help?”

The fact is many people who bought homes with payments they could handle have been caught in a negative equity situation when things changed.  The Wall Street Journal recently published an interesting case study that illustrates the problem.

A New Jersey couple with some real estate savvy and limited resources bought a modest home in 2004 when interest rates were low.  To avoid having to pay PMI, they also took out a second loan to increase the down payment.  At closing, the couple was surprised to learn that the second mortgage was actually a balloon loan due in 14 years.  They were taken aback but anticipated that within 14 years, they would have refinanced, plus they would be a two-income family.

By 2010, their $328,000 home is worth $270,000.  They are happy in the home and have no plans to abandon it or sell it at the moment—but they do feel trapped.  If they wanted to accept a job elsewhere, they couldn’t sell it now unless they wanted to take a loss and live under a bridge in their new city.  They can’t take out a home equity loan to put on an addition or make improvements, as they have no credit left on their home equity line.

What they are caught up in is what many responsible homeowners face.  They did not expect their home to be like a car that loses a big chunk of value once they drive it off the dealer’s lot.  Because the man has a steady job, they consider themselves “technically underwater but not drowning.”  They have negative financial equity alongside great “sentimental equity.”  However, they wish they had waited to buy.  The one baby they expected when they bought the home turned out to be triplets, so they are painfully aware that their lost value could have paid for a good chunk of the college education bills they will face shortly after their balloon payment is made.

Irresponsible homeowners have dominated the news in the mortgage crisis, but people like those described here are caught up in this mess too.  If this describes your state of affairs and you need to move, Express Realty Services may be able to help you.  We can help you sell your home quickly if you need to sell. In fact, we guarantee to sell your home in 60 days or less, or we’ll buy it. Through our sister company Express Homebuyers, we also buy homes for cash.

Lost in the Crowd?

When buying a home, you will likely become acquainted with a whole slew of real estate professionals.  From the realtor who helps you select a home to the listing agent who shows you some promising inventory, the experience can be difficult (and extremely frustrating) when any of these pivotal characters fail to meet your expectations.  One of the most controversial areas today is the whole appraisal process.

Help for the Weary

The folks over at Fannie Mae and Freddie Mac are doing their best to ensure that no one plays fast and loose with the appraisal process.  To that end, they’ve created a new code that holds appraisers to a higher standard of quality and professionalism. Sounds great, right? Well, it has already gotten serious backlash from people in the real estate business who believe stricter rules can only hurt an already struggling housing market.

As a result, Fannie and Freddie have tried to clarify what the new code means for homebuyers like you.  One major change outlined in the clarification document is the need for mortgage lenders to accept appraisals only from professionals with experience in the region in question.  Think about it: wouldn’t you want the appraisal coming from someone who knows the area your future home is in?

While communication between and real estate agents is permitted in the process (after all, realtors can be an excellent source of information), they cannot have a hand in selecting the appraiser.  The concern here is that a realtor eager to close a deal will select an appraiser they enjoy a mutually beneficial relationship, one willing to provide the estimate necessary for the transaction to be completed as quickly as possible.  Similar arrangements can often exist between appraisers and lenders, who have been known on occasion to lean on appraisers to overstate property values. While that may help a seller sell his house fast, it certainly won’t help when the buyer faces this dilemma: “I wanted to buy my house fast, but it didn’t meet appraisal. Now what do I do?”

Appraisal Delay or Consumer Protection?  You Decide which is Best.

Basically, Fannie and Freddie’s goal in creating a new code is to protect the homebuyer, and restore purity to the appraisal process.  Whatever delay these new measures may cause will be more than made up for by the increased confidence buyers will have in the accuracy and integrity of the professionals they turn to for an estimate.