Friday, May 30, 2008

Sell Home Faster: Use Creative Freebies!

Your home has been on the market for several months and it’s been weeks since your Realtor handed you a serious offer from a potential buyer. You’ve dropped the price twice but you haven’t shown your home in over a week. You’ve seen other homes sell, and yours is at least as nice as those. You’re convinced that if more people would just come and see your home, it would sell. What do you do?

The first thing most home sellers think of is to fire their current realtor and hire someone else. “This may be the right thing to do but”, as Morrie Shepherd, Broker of Metro First Realty says, “not always.”

Shepherd has been in Real Estate for over two decades and has seen just about every market condition possible. “The Realtor is not a magician, even though sometimes it seems they are able to pull off the impossible. The Realtor is actually a consultant to the seller, a prospector for potential buyers, a shrewd negotiator and the seller’s personal cheerleader.”

So before you fire one Realtor and hire another, or worse yet, fire your Realtor and decide to sell you house yourself, consider the following ideas to speed up the selling process.

Instead of dropping your price another $5,000 consider offering a vacation package with the purchase of your home. That’s right, allow the new home owners the ability to pick their destination and provide a $5,000 trip allowance. Before you get the wild idea of offering the trip to your Realtor as an incentive, realize that will most likely get them into trouble and in some cases they could actually lose their license. The same goes with the other enticements I will mention.

Visit with a car dealership and investigate the possibility of offering a one-year lease on a new car as incentive to purchase your home. If this doesn’t trip your trigger how about offering a sizeable landscaping allowance that could be used for shrubs and trees or a new deck.

If your home does not have a designated theater room you could consider offering a professionally installed flat screen and surround sound entertainment system for the family room.

There is at least one computer in most homes but the average age of these computers is probably over 2 years. Why not offer prospective buyers a computer package; perhaps a new desktop for the study and a laptop for the kitchen.

If you home has an in-ground pool, consider pre-paying for the next year’s pool service. If home owner’s dues in your neighborhood are significant, offer to pay these in advance for the next year or two.

Anyone can offer a carpet or appliance allowance, you could offer to pre-pay for lawn service, security system monitoring, utilities, or moving company services. If your home has a wine cellar or closet, offer to include a selection of fine wines.

The list of freebies is nearly limitless. But keep in mind that many prospective buyers would still rather have the price of the home reduced by the amount of the incentive. And in the final analysis, you don’t really care. If the creativity of the freebie has attracted the buyer and they like your home enough to make an offer, does it really matter whether or not they take the $5,000 vacation package or you reduce the price of your home by that amount?

Now for the disclaimer: check with your realtor and your lender before publicizing these offers. The Realtor’s Broker may have some specific guidelines that apply to these kinds of offerings. Additionally, when incentives to purchase are offered, the language of the contract is very important for the buyer, the seller and in many cases the lender providing the financing.

Lenders can be finicky when it comes to purchase contract language. It is not possible to check with every lender for the correct manner to prepare the contract for this type of incentive, but check with a couple to get the basic idea of how they want the contract to read.

These are just some ideas to consider if you need to increase the traffic of potential buyers who come and see your home. Hey, selling a home just got fun again!

Wednesday, May 28, 2008

Help, My Home Loan Was Just Sold!

We’ve all received a similar letter notifying us that the servicing for our home mortgage has been transferred to a different company. These letters create feelings of worry and concern among many home owners; and for good reason.

During the past few months lenders nationwide have imploded and the loans they were servicing were quickly transferred to other loan servicing companies. What should be a streamlined process has, in some cases, become a living nightmare for good people who pay their mortgage on time every month.

One bankrupt lender, American Home Mortgage Investment was accused by Freddie Mac of failing to pay property taxes and insurance premiums on over 4,000 home mortgages valued at nearly $800 million. Freddie Mac warned home owners that their lender’s failure to pay for these services out of their escrows could result in lapsed coverage and delinquent tax liabilities, penalties and even foreclosures. This situation was eventually resolved and the potential damage was minimized, but it serves to illustrate to every home owner the importance of being vigilant about your home mortgage.

You mortgage servicer will most likely change: the company who originates your home loan more than likely will quickly sell it to another investor who may or may not have their own loan servicing company. The servicer is the entity you make your mortgage payment payable to. If you’re paying 6% for your home loan, a servicer may take .25% of that interest rate as a fee and pass on the remaining 5.75% to the investor.

A change of servicer does not change your obligation: the note you signed at closing spells out the interest rate and the terms of your loan and if you fail to abide by the terms of that note, whoever owns your note can foreclose.

When your servicer changes expect two letters: the first letter will be a “goodbye” letter. Not unlike a “Dear John” letter your previous servicer send this letter to inform you that your loan has been sold and future payments will be made to a new servicer. You have no choice in this matter but there are a few things you can do to protect yourself. The second letter is a “hello” letter from your new loan servicer.

Make sure you send the payment to the correct address: throw away old envelopes, change the payee information in your computer, update your automatic bank draft account information, etc. By federal law any payments sent to the wrong address in the 60 days after the transfer aren’t supposed to be counted as late. At the same time, it’s probably easier to make sure the payment is made to the correct servicer than it is to get late payments removed from your credit report.

Verify that your property taxes and home owners insurance are paid: some home owners pay these expenses on their own, but many mortgages have escrow accounts set up to pay these bills when they are due. If your home loan has an escrow account it is still your responsibility to verify that your property taxes are paid on time and that you home owners insurance is current and up to date.

Know how to get help: if you aren’t getting the help you need from your loan servicing customer service department, send a written complaint to the customer service department. But make sure this letter is sent separate from your mortgage payment. Also send it certified, return receipt requested to establish a paper trail.

Tuesday, May 20, 2008

Avoid These 7 Home Buying Traps

It’s the American dream that has of late seen a dark cloud emerging overhead. The cloud is named “dropping home values”. It’s happening everywhere except here in the OKC Metro. My article of a few weeks ago demonstrated how property values are holding firm here in the metro while in many places throughout the U.S. home values are eroding like a sugar cube in hot coffee.

So for the few areas around the country (like our great city) where purchasing real estate is still a great idea, what are some of the more important pitfalls to avoid when taking the plunge into home ownership?

Inspect the Inspectors: Every home transaction should have an inspection performed by a licensed and professional inspector. Almost every Realtor has an inspector they like to use and they usually aren’t bashful about recommending them. It’s still your responsibility to meet the suggested inspector to determine whether or not you are comfortable with them. If not, interview several others until you find the inspector you want. Sometimes it’s best to find the inspector of your choosing, this way you might feel more comfortable that the only interests being served are yours.

How much you can afford: This surprises many first time buyers, but the people offering you the advice really don’t know what you can afford. When providing you a monthly payment amount, they are giving you the guidelines form the lenders. Only you know how much home you can afford so you can still save for the future and go on vacations. Remember, the amount of home you can afford is determined by you and your budget, not an arbitrary figure extracted from a lender’s equation.

Short Term Financing: Taking a five-year ARM (Adjustable Rate Mortgage) loan may be appealing because the rate is a bit lower and anyway, you’ll probably refinance the loan within 5 years. But be careful, your job or income situation may change between now and then and you might not be able to refinance later. Or your current health situation may not be a rosy five years from now. And don’t forget the potentiality that interest rates could rise making it impossible for you to afford the payments at the newly refinanced rate. .

Opening and/or closing credit accounts: Once financing for your new home is underway, in other words when you’ve signed the papers and the loan process has begun, don’t go out and apply for new additional credit of any sort thinking that you’re helping your credit picture. At the same time, don’t close any credit accounts during this time. Both of these activities have negative impact on your credit picture. The best advice is to wait until your financing is complete, in other words, until after closing, then you can go out and apply for new credit or close existing credit accounts.

Study the neighborhood: Drive around the neighborhood making your own observations. Don’t take the flyer’s opinion that it’s a “quiet neighborhood”. Take several tours at different times of the day and evening. Perhaps even walk around the neighborhood and make additional observations. Talk to neighbors and find out where the problem neighbor is. Every neighborhood has one and you don’t want this person living next door to you.

Buying a home when you’re not ready: Don’t allow anyone to rush you into buying a home until you know you’re ready. It’s easy to get into the home buying mode when key friends or relatives are purchasing new homes. Especially when your current home has lost its state of nirvana. Be your own boss, don’t let anyone rush your plans to buy; you’ll know when you’re ready.

Not buying a home when you are ready: Lastly, don’t sit on the sidelines forever. No one truly knows what the real estate market is going to do. So when you’ve done your research and you know you’re ready, dive in. Tour the home and then a couple of days later schedule a follow up tour. If the home still meets your needs and it falls inside of your budget, make your move! Trust your instincts; make you best deal and enjoy it.

Friday, May 16, 2008

Fradulent Foreclosure Relief

Perhaps one of the most insidious manners in which humans prey upon one another is when one individual is hurt, stunned or injured. Most home owners are decent folk. They bought a home with a mortgage fully intending to make every payment. But then life happened.

For whatever reason, and there are many, first one payment was missed and then a second. Now 60 days late on mortgage payments the strain and embarrassment are almost too much to bear. Any family finding themselves in this position is vulnerable to a very real type of home equity fraud.

At every home closing there are what seems to be an endless stack of papers and countless places for you to sign. After the first few sheets the massive amount of information contained in these documents serves as an effective novocane for the brain. In short there are very few borrowers who are capable of retaining more information than the monthly payment amount and a ballpark estimate of their interest rate.

This mind numbing experience is overwhelming for most borrowers, so much so that they resign themselves to never truly understanding it all. And herein lays the danger.

When the borrower finds themselves more than 30 days in arrears on their mortgage payment, the lender places a negative mark on the borrower’s credit. They do because one of the papers every borrower signs at closing is the agreement that should they make late mortgage payments the lender will report this to the credit repositories.

When the borrower becomes 60 days late, because this late payment involves real estate, the event falls into the category of public information and is filed in the county where the property is owned. Anyone can research this information and for a small fee obtain an official report of properties at risk of foreclosure.

Unscrupulous people take this report and, under the guise of helping the home owner “get back on their feet” actually commit a series of acts placing the home owner in a worse situation than where they currently find themselves. The con goes something like this.

The con contacts the home owner who is seriously in arrears with their lender and promises to put their experience and knowledge to work for them helping them “catch back up” on back payments and keep their home. The home owner is already fearful of losing their home and any equity they have built, so they welcome this redeemer into their home.

This knight in shining armor produces a stack of papers that at first glance promise to help the home owner keep their home without having to file bankruptcy and without further damage to their credit report. Instead of protecting themselves and their home they have in fact signed the ownership of their home over to the con.

The con is experienced in what he does next. Once he is legally placed on title of the home, he can and does take out a second mortgage removing as much of the homes equity as possible.

Not only does he not make good on any of his promises to help the home owner “catch up” on back mortgage payments, he also robs them of any equity they had in their home. This leaves the home owner in far worse condition than before. He walks away from the entire situation thousands of dollars richer than he was before.

There are legitimate agencies that can help anyone who finds themselves in arrears with their lender. One such group is the Homeownership Preservation Foundation. Here home owners can find guidance and counseling to help them avoid foreclosure. Contact them at 1-888-955-HOPE. This service is available 24 hours a day and provides counseling in multiple languages.

An additional resource defining key mortgage terms can prove helpful to anyone going through this painful process. Knowledge and understanding are even more critical when vulnerability is at it greatest. This resource can be found at:

Wednesday, May 14, 2008

How to Stage Your Home for Quick Sale

Thanks to the abundance of home improvement shows on some cable T.V. channels home shoppers have higher expectations than they once did. When the average home shopper drives by a home first impressions are more important than ever. And when they walk into a home for the first time it truly is the subjective elements that can make the difference between them making an offer or taking a pass.

Most home sellers could benefit from the services of a home stager. Home stagers provide everything from a written evaluation of ways to maximize the home’s features to providing contract labor for any suggested improvements to additional furnishings and decorations.

Staging Solutions by Suzan owner, Suzan Knutson provides several helpful ideas for anyone looking to stage their home for optimum sale. “First they need to have a stager come by for a consultation visit.” This is not as intimating as it may sound but Knutson warns that home owners should be prepared to hear suggestions that will stretch their imagination.

Knutson related one home she staged where she took the oversized entertainment center apart and used the two end pieces as bookcases in the study. “Most people have lived in their home so long that they can’t imagine their furniture being in another room of the house” said, Knutson.

The front porch is critical to making a feel good first impression. Knutson says home sellers should get a new doormat and even paint the front door a nice complimentary color. Seasonal flowers placed in decorative pots can serve to draw potential buyers into the home for a closer look.

Knutson has 13 home staging secrets and shared several with me. “I’d like to share them all, but if I did, why would people need me?” She said with a smile. Knutson recommends to think of staging your home like you would if you were selling your car. No one would think twice about detailing your vehicle before selling it; it should be the same with your home. But when considering a stager’s suggestions don’t get offended. You have lived in the home and like it, but the stager is charged with making the home sellable.

Home Staging Secret One: Conquer the clutter. This means minimizing the nick-nacks that sit around the home. It also means thinning out the closets and other storage areas. Cluttered shelves and overstuffed closets and storage areas give the impression that the home is too small to be lived in comfortably.

Home Staging Secret Two: Less is more. This means that you might be asked to take out as much as half of your furniture. “Remember your selling square footage, not furniture” Knutson says. Potential buyers want to see open floor plans and bright rooms.

Home Staging Secret Three: Accessorize in odd numbers. In other words put three candlesticks on the mantel, or 5 decorative rocks in a display bowl. Knutson advises that odd numbers of accessories are more appealing than even.

Home Staging Secret Four: Paint it black. If the furniture left in the home shows signs of wear like a wood breakfast table and chairs, paint the chairs black and the table an accent color. If the coffee table has seen better days paint it black.

“The benefits of using a home staging services are easy to point out” Knutson says. Staged homes bring a higher selling price. Staging a home can be done with little or no cost apart from the initial written report which in many cases can be as low as $75. Staging a home can sell much quicker than the same home not staged.
If you’re looking to maximize your selling price and shorten the time your home stays on the market consider using the service of a home stager. Suzan Knutson can be contacted at her website: or via email at:

Tuesday, May 13, 2008

New Web Helps for Home Buyers and Sellers

The Internet is in a constant state of flux. Web pages that were there yesterday are gone today. There are hotlinks, permalinks, blogs and diggs. At least they were there the last time I logged on. But or those of us who are either looking to sell a home or buy a home there are two new resources that deserve an honorable mention.

If you’re looking to buy a home you need help in several ways. First you need to find a home and then you need to find financing for that home. That is unless you’re among the fortunate few who pay cash for their homes.

If you’re looking for a home feel free to log onto and interact with other home buyers and real estate professionals to discuss your needs, wants, concerns and questions.

This website is fairly new and features sections for home buyers and sellers where you can pose questions to real estate professionals all across the U.S. Here are a few questions that you can tailor make to suit your specific needs.

Can someone tell me the positives about (a specific) neighborhood? How do I interview a buyer’s agent? Can anyone tell me if the offer I am about to make is a low-ball offer and likely to offend the seller? Which are the safest neighborhoods in town?

Every day there are questions posted that could quite possible spur your thinking about things you would not have considered before making a home purchase. Realtors may find this site helpful in networking with potential buyers by answering some of their questions.

Asking a question is as simple as typing in a box and clicking the ask button. Before long you’ll receive emails notifying you of the answers. You’ll be amazed at the depth of the knowledge pool available on this site. And who knows you might even find out something you didn’t know before.

If you’re a home seller you can find some helps here as well. Questions about setting the best asking price and when to make a price concession and when you do, how much is too much can be found here. Along with these questions you can also pose questions about how to make your house more sellable. Even if you’re using a realtor to sell your home, it never hurts to have more than one opinion.

Another site for both buyers and sellers is This site has been around for a while and is quite popular to help sellers determine the value of their homes. But now Zillow offers a new service for home buyers. Now there is a mortgage tab on the home page.

Click this tab and after you create a profile you can request mortgage finance quotes in a completely anonymous way. The form will ask you for information about your estimated credit scores, your income, debts, purchase price and down payment and then submit your request completely anonymously. In other words any mortgage provider who has signed up to receive this request cannot see your name, phone number, or email address. They can provide quotes to you and you have complete control over whether or not you wish to respond to them. Leave their quote unanswered and they have no way to contact you.

Of course these are just two of the hundreds of Internet helps available to you. You may already have other web applications you like to use, but you owe it to yourself to check these out. There might be something of value there. Of course there is no substitute for meeting a realtor and a mortgage provider face to face. Internet is great for investigation, but if you’re anything like me, you like to meet someone before trusting them with the single biggest purchase you’re likely to make in your life time.

Good Luck!


Monday, May 5, 2008

Haunt Free House

In my post Aptil 25, 2008 I told how I had been hearing a haunting sound that made me think my house was haunted. Well, thanks to a reader (Lee from OKC) I discovered that the problem was a vibrating rain gutter.

When the wind blew from a specific direction and with sufficient velocity it caused the back side of the rain gutter (the side closest to the side of the house) to vibrate. If you look at your gutters you may see a slight gap in this spot.

Well the problem was a quick fix and here's what I did.

I took a wood screw (about 1 1/4 inches in length) and a soft plastic spacer. Then used my cordless drill to affix the back of the gutter to the house, thus preventing further vibration.

The next evening another wind storm blew through Oklahoma City and I stepped outside just to check out my handywork.

I stood under the spot I repaired and the strange noise was gone.

Just for good measure I built a small fire underneath that place and offered the neighbors cat as a sacrifice against future haunts.