Real Estate Rapture

From time to time you hear about lenders that allow the use of sweat equity as a credit toward a down payment, but not all of it. In other words, allowing you, the buyer, to agree to do some of the repairs or remodeling yourself.  Most lenders, however, are not thrilled with this concept.

The problem is valuing labor. If a professional paints a house there is work completed to a given standard (that helps maintain the value of the home, the lender's security if the loan is defaulted) and there is a bill for labor and expenses (paint, caulk, etc.).

With sweat equity, there can be a cost for supplies, but how is labor to be valued? At the same rate as for a professional? A discount? And what about workmanship?

The best approach is to speak with as many lenders as possible to see if they have a program that allows the use of sweat equity. Ask about the maximum sweat equity contribution allowed, total cash needed to close, rates, points, etc.

Once you've got a lender lined up, we need to go house hunting!  You don't need a license to go house hunting, we've got ours!

God is good!

Randy Fry - Broker/Owner
Great Commission Realty - We're On A Mission!
mailto:realtorrandy@randyfry.com
Office: (417) 889-3558
http://www.RandyFry.com - Search 9,000+ Listings!

One of the key traits of a successful real estate agent is the ability to multi-task.

You have to be able to work on a task, get a phone call or email, answer it, and then jump back into your project.

There are days it feels like I make little progress on some projects, but in this age of instant information every second counts!

When you snooze you lose can be true and costly.

God is good!

Randy

What is a "land contract?"

A "land contract" or "contract for deed" or "agreement for sale" is an installment sale you buy today but only get title after some or all of the payments are made. If you miss a payment, you could lose some or all your equity. Because title has not been transferred, there is nothing to foreclose. Some states, however, have special provisions protecting those who buy property with a land contract.

Be careful in a land contract situation to look at the proposed financing. Is lender approval required? If yes, and such approval is not received, the loan could be called.

State rules regarding land contracts vary extensively and such arrangements should be reviewed by an attorney or legal clinic before acceptance.

A land contract may allow a buyer to obtain real estate even if he or she is not able to obtain financing through regular loan channels. A land contract may allow a seller to market a property when interest rates are high.

If a buyer with limited financial capacity purchases with a land contract, then a seller may have problems collecting monthly payments. However, since a buyer with a land contract does not have title until all conditions are met, it is often possible for the seller to get the property back with a "forfeiture" rather than a "foreclosure." The attraction of a forfeiture is that it is much quicker to obtain than a foreclosure. It is also a complex undertaking that should only be done with an attorney.

If a land contract involves the use of existing financing that cannot be assumed, that could set-off a due-on-sale clause. Both buyers and sellers could lose the property if the loan cannot be repaid.

Or, suppose Seller Jones sells a property to Buyer Smith using a land contract. Title will remain in Jones' name until Smith makes a certain number of payments. But, suppose that Jones goes bankrupt. What rights does Smith have to the property? Or, suppose Jones does not pay the property taxes? If the local government forecloses, what rights does Smith have?

Also, what happens if Seller Jones goes off to Tahiti? How does Buyer Smith get title?

Land contracts should be seen as complex arrangements. Both buyers and sellers should consult an attorney or legal clinic (separately) to assure that all aspects of the transaction are fully understood.

God is good!

Randy Fry - Broker/Owner
Great Commission Realty - We're On A Mission!
mailto:realtorrandy@randyfry.com
Office: (417) 889-3558
http://www.RandyFry.com - Search 9,000+ Listings!

Today I spent the day with a nice couple from Florida.  We were looking at homes on small acreages.  It was only natural that they wanted to know where the property lines were on each home we looked at.  We looked at fourteen homes and only one had a survey or plat or aerial photo or stakes to mark the property lines.  All the rest we had to guess.

Want to take the guesswork out of it for buyers looking at your property?  Simply provide a copy of the survey, an aerial photo with property lines, a plat map, or even stakes or ribbons on the corners would help.

Your prospective buyers will appreciate it.

You'll appreciate it to because you're likely to get an offer more quickly!

God is good!

Randy Fry - Broker/Owner
Great Commission Realty - We're On A Mission!
mailto:realtorrandy@randyfry.com
Office: (417) 889-3558
http://www.RandyFry.com - Search 9,000+ Listings!

So here's the deal.  A prospective buyer is reviewing properties that have been emailed to them.  They come to your property, read the details, and get very excited!  It has everything they want!  There's even a four car detached garage!  So, they call me and email me and jump in the car and drive 8 hours, spend the night in a hotel, and get up bright and early to see your listing.  The house looks great.  Even better than the photos.  The homeowners have given us a great tour.  Then they ask to see the 4 car detached garage.  The homeowners say this is our only garage as we stand in a large attached garage that has one vehicle in it.  The buyers' enthusiasm for the property disappears.  You see, Mr. Buyer wanted a workshop that was away from the house.  He has a noisy hobby of working with wood.  A wasted trip...

Could it have been prevented.  Absolutely.  The buyers could have called me and asked me to confirm the house had a four car detached garage.  But why would they?  It says in simple words, and still does, that the house comes with a four car detached garage.

Garage Type

Detached (4)

Cooling

Heat Pump, Electric

Heating

Forced Air, Ground Source, Wood Stove, Electric, Zoned (2+ Units)

Interior

High Speed Internet

I copied those four items from the listing itself.  It doesn't have a heat pump either.  It doesn't have ground source heating.  And, you guessed it, there's no high speed internet either...

After 51 days on the market, this listing has a lot of errors.  It motivates me to always check my listings.  I ask the owners to verify every box I have checked on the listing paperwork when they sign it.  Then, after faxing the documents to the MLS I will check the listing line by line to see if they accidentally made any typos as they entered it into the system.  Yes, it absolutely takes extra time to do all this verification.  But it's worth it.  In this case alone it could have save my clients a 16 hour round trip, all that gas money, all those meals out at restaurants, and the expense of a hotel.  It could have also saved the buyer's agent (me) a 3 hour round trip to show the house.  It could have also saved the homeowners the inconvenience of having someone look at their home that has no intention of buying it since it doesn't have everything they want in their next home.

Accuracy pays off.

God is good!

Randy Fry - Broker/Owner
http://www.GreatCommissionRealty.com/permanentreferrals
We're On A Mission!
Home of Permanent Referrals
mailto:realtorrandy@randyfry.com
Ph: (417) 889-3558

When a home is financed, the borrower agrees to make regular monthly payments. However, if those payments are not made, if they are late, or if the lender's security is reduced (by not making payments, damaging the property, not maintaining insurance, not paying property taxes, selling the property, selling a part of the property by placing someone else on the title, etc.), then the lender has the right to call for the complete and immediate repayment of the loan. The mortgage language outlining the lender's rights is generally called a "due-on-sale" or "acceleration" clause. One effect of a due-on-sale clause is that it effectively prevents a loan from being assumed.

Borrowers should note that state and federal law may limit the ability of lenders to enforce a due-on-sale clause. For instance, a title change in the event of an estate situation may be allowed.

God is good!

Randy Fry - Broker/Owner
Great Commission Realty - We're On A Mission!
mailto:realtorrandy@randyfry.com
Office: (417) 889-3558
http://www.RandyFry.com - Search 9,000+ Listings!

It's amazing how many homes are on the market that are absolutely not ready to be seen by prospective buyers.

Some things that stand out are how the house looks from the street.  If a buyer doesn't like what they see when we drive up we may drive on.

So, assuming you've convinced them to take a look inside, make sure they like what they see.  Simple things like a tidy & organized kitchen.  A bathroom that doesn't look like someone got interrupted during their shower and had to rush out the door.  And yes, make your bed!

Every day your house is on the market is a day you don't get to move to your next home.  Make a little extra effort and do the right things.  You'll sell quicker and for more money.

That's worth it!

God is good!

Randy Fry - Broker/Owner
Great Commission Realty - We're On A Mission!
mailto:realtorrandy@randyfry.com
Office: (417) 889-3558
http://www.RandyFry.com - Search 9,000+ Listings!

Once in a while a listing doesn't sell.  When that happens, often the listing agent is blamed.  A common solution when the owner feels the agent is to blame is to hire another agent.  If you're the other agent, please take your own photos of the property.  It's a bit tacky to re-use the fired agent's photos.

Also, here's some other advice, and I try to remember these myself:

1. When taking a picture in the bathroom, put the toilet lid down.
2. When taking a picture with mirrors in it, don't catch your image in the reflection.
3. The MLS requires you don't have your yard sign pictured in the main photo.
4. Take lots and lots of pictures.  You don't have to use them all, but they may come in handy.  I often take pictures of breakers, water heaters, furnaces, air conditioners, appliances and more.  It can save you a trip back to the house to check when you get a question from an interested party.  Save all the photos on your computer in a directory that is unique to the property, like the address or MLS number or seller's last name.  Then, you'll know that the water heater you're looking at in the picture belongs to the house you're researching.
5. Try to review your photos before leaving the house.  Sometimes they are backlit or too dark or show something you didn't notice.
6. Don't post any photos that show pets or people on the listings.
7. Don't include your vehicle in any of the photos.

If you have more ideas, please share!

God is good!

Randy Fry - Broker/Owner
http://www.GreatCommissionRealty.com/permanentreferrals
We're On A Mission!
Home of Permanent Referrals
mailto:realtorrandy@randyfry.com
Ph: (417) 889-3558

I've been asked, "can I discount the price to create a down payment?"

Short answer: No. 

Lenders provide financing on the basis of the sale price, or the appraised value, whatever is less.

In the case of a "discounted" price, say selling a home worth $150,000 for $140,000, the sale price is $140,000. Lenders do not recognize a discount.

A better approach is to pay full market value but to make the transaction dependent on a "seller contribution" at closing. The effect is the same, but the accounting makes more sense to lenders.

God is good!

Randy Fry - Broker/Owner
Great Commission Realty - We're On A Mission!
mailto:realtorrandy@randyfry.com
Office: (417) 889-3558
http://www.RandyFry.com - Search 9,000+ Listings!

You should provide a home owner's warranty on your home for the buyer.

The cost is about $400 and you don't even pay that until closing!

It protects the buyer against problems that might occur in the house or with the house or appliances after they become the owner for a full year.

That's great for them, but what's in it for you?

Your house will look more appealing to the buyer because they can rest assured that a huge expense isn't just waiting to raise its ugly head as soon as they close.

One of the best parts of having the warranty in place is that it covers YOU while the home is listed!  Just last week one of our clients whose home is listed discovered a major problem with the circuit breakers that was covered by the warranty that still hasn't been paid for.  It saved them over $2,500!

Home owner's warranty?  Get one!

God is good!

Randy Fry - Broker/Owner
Great Commission Realty - We're On A Mission!
mailto:realtorrandy@randyfry.com
Office: (417) 889-3558
http://www.RandyFry.com - Search 9,000+ Listings!

The second quarter of 2007 has closed and I thought I'd share a few numbers with you.

April-May-June 2007 saw 1548 homes in Springfield, Nixa, Ozark, Republic, and Battlefield close.  The average home sold for $154,008 and took 55 days to do so.  The same period in 2006 saw 1809 homes close for an average price of $152,079 in an average of 53 days.  1104 homes had listings expire or withdrawn in 2006, in 2007 that number was 1338.

To sum it up, prices are holding their own with a slight increase of 1.2% over 2006 and 261 fewer homes sold, down 14% from 2006.

God is good!

Randy Fry - Broker/Owner
Great Commission Realty - We're On A Mission!
mailto:realtorrandy@randyfry.com
Office: (417) 889-3558
http://www.RandyFry.com - Search 9,000+ Listings!

It's time to look back at June and see what homes have the honor of being the highest and lowest priced homes to sell in Springfield.

This one sold for $790,000 on June 11th.  It's located in Highland Springs, just southeast of Springfield.

If you had $9,000 you could be the proud new owner of this home in Northwest 2 in Springfield.

In all, 366 homes sold in Springfield last month.  The average price was just under $150,000.  Average days on the market - 48.

God is good!

Randy Fry - Broker/Owner
Great Commission Realty - We're On A Mission!
mailto:realtorrandy@randyfry.com
Office: (417) 889-3558
http://www.RandyFry.com - Search 9,000+ Listings!

The past few days I have been trying to find a REALTOR in another area to help one of my clients find a house there.  I'd do it myself, but it is several hours away, so not practical.

So, I got on the internet and looked for REALTORS.  I would look at their website and decide if they looked like a good fit for my clients.

I narrowed it down to four.  I emailed all four.  I got a reply back from three.  Two seemed to be eager to help and the third one said she doesn't cover that area.  I appreciate the honesty, but her website stated in large letters that the town in question was in her territory.

I thought about pointing that out, but I'd rather pick my battles and I just didn't see the point.

I did learn something from it myself though.

I need to make sure my advertising is current and accurate.  If my specialty or territory has changed since I created my website or my ad, I need to revise it as soon as possible.  With websites, change is simple.  With yellow pages ads it may take several months until the next year's edition.

Let's make 2007 part 2 the best 6 months ever!

God is good!

Randy Fry - Broker/Owner
http://www.GreatCommissionRealty.com/permanentreferrals
We're On A Mission!
Home of Permanent Referrals
mailto:realtorrandy@randyfry.com
Ph: (417) 889-3558
Fx: (888) 296-5662

Your agent may have told you this already, but when someone is going to be showing your home to buyers, you should not be there.

My experience has shown me that when I can show a home without the owners there that the buyers feel more comfortable to spend time looking at what the home has to offer.

Conversely when the owners are there, the buyers feel awkward looking to see if closets are big enough for their needs, or checking to see the quality of the cabinets, or even to make comments to each other.  Instead, they tend to rush through, miss things, and almost run to the door to leave.

So, which scenario best describes the way you want prospective buyers to experience?

When buyers are coming to view your home, get out!  It will be worth it!