5 Costly Mistakes First-Time Buyers Make

CNNMoney.com's Les Christie has listed five common and costly mistakes first-time buyers make:

1. Ignoring the costs of having a low credit score. Lower-score borrowers pay thousands of dollars in increased interest rates over the life of the loan.
2. Muddying the waters by shopping for other things before closing. Lenders continue to check credit scores right up until the time of closing. Too much shopping could cause the lender to take back the loan.
3. Scrimping on an inspection. Being surprised by the need for expensive repairs can be financially devastating.
4. Buying without contingencies. Buyers should give themselves an out if the inspection turns up problems or the bank raises the interest rates.
5. No money for insurance. Insurance can be surprisingly pricey. Buyers who don’t budget for it can face a nasty surprise.

BUYERS TIP

Home Buyers can now push for lower closings costs!

Closing costs (lending charges, local tax & transfer fees, title insurance, appraisal costs and other 3rd party services) are typically 3% of the cost of the property. According to Guy Cecala, publisher of Inside Mortgage Finance, most buyers should be able to do better than the 3% standard. Wire transfer fees, loan application-processing fees and high FedEx charges are some fees buyers shouldn't have much trouble negotiating.

MORTGAGE RATES

Freddie Mac reported:

• 30 year fixed stayed flat averaging 5.07%
• 15 year fixed loans down to 4.39% from 4.4% last week
• 5 year hybrid adjustable-rate mortgage averaged 4.03% down from 4.08%
• 1 year ARMS rose to 4.22% from last weeks 4.13%

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Foreclosure rates SURGE!!!

According to Realty Trac Inc., the number of homes taken back by banks jumped 35% in the first quarter of the year compared to last year's. Also, homeowners facing foreclosure rose 16% during the same period; 7% in the last three months of 2009. Rich Sharga, a Real Trac senior VP says, "We're right now on pace to see more than one million bank repossessions this year." This means that banks are wading through the backlog of troubled home loans at a faster pace...

Remember last year our Obama Administration put pressure on banks to modify home loans for troubled borrowers. This pressure, coupled with state enacted foreclosure moratoriums and the banks' issues with the handling of all the problematic loans eased foreclosures, however it's now REVERSING! "We're finally seeing the banks start to process the inventory that has been in foreclosure, but delayed in processing," says Sharga. "We expect the pace to accelerate as the year goes on."

The states with highest foreclosure rates in the first quarter were:

1. NEVADA - 1 in every 33 homes was facing foreclosure
2. ARIZONA - 1 in every 49 homes there received a foreclosure related notice
3. FLORIDA - 1 in every 57 homes
4. CALIFORNIA - 1 in every 62 homes

There is good news, the sooner we get the foreclosures out of the mix (obviously not entirely) the sooner the market will stabilize, however prices WILL RISE!!! So if you are thinking of buying, DO IT NOW while the deals are still a steal!!!

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HOAS getting SLICK, Floridians in "woe" & Distressed properties on the RISE

HOAS (homeowner's associations) in need of cash are using a tactic to force banks to pay association fees . The "reverse foreclosure" tactic works like this:

When a homeowner/borrower stops paying their mortgage, backs more times than not delay taking the property into foreclosure. During this delay neither the owner nor the back pay the association fees. So, to remedy this the association files its own foreclosure notice. If and when the association takes over the title, it is still not able to sell the property due to the bank's lien. So, the association goes to court, renounces the property and asks the judge to give title back to the bank. When the judge does this, the bank has the obligation of paying the fees. Touche HOAS!!!

When it RAINS it POURS!

We all know, especially us here in Florida, this cold winter was not only unexpected but not appreciated. However, that's not all Floridians had to "woe" about. Homeowners who faced foreclosure during our housing downturn were not just driven there by one factor but were victims of multiple issues that left them financially strapped, according to a study conducted by Strategic Guidance Stems. Joel Searby, their director of marketing, said “What we found in talking with people who've gone through foreclosure is that there's a 'plus-one factor,' meaning job loss coupled with other circumstances such as divorce or health problems that usually led to homeowner distress."

Are distressed sales gaining greater market share?

Yes, according to First American Corelogic, distresses properties accounted for 29% of all U.S. homes in January 2010 (average sales price $161,600). Real estate owned sales rose 22% up from December's 19% (average sales price $247,700) and short sales rose to 8% from 7% with an average sales price of $141,900.

Numbers don't lie folks prices are rising, however the ship has not sailed so

DON'T MISS THE BOAT!!!

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Potential Home Buyers who DELAY have a lot to LOSE

Springtime is the time when the market HEATS UP, so all you potential buyers need to be prepared to move quickly on a particular home. First time home buyer and move up tax credits worth $8000 and $6500 expire APRIL 30th. So, my best advice is to begin working with a Realtor NOW!!!

As I mentioned before, the foreclosure home inventory is decreasing, so some buyers are experiencing "bidding wars" which are pushing prices up. Currently about 30% of markets are experiencing price increases.

We still have low mortgage rates, however if the FED stops buying morgage-backed securities at the end of March- 30 year rates will probably rise 6%.

Don't miss this GREAT opportunity, because as we all know this is the time to BUY!!!!

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Now I had a California Facebook friend ask me an important question about a Landlord's responsibility concerning security. Here is a general list of Landlord's Responsibilities...

Providing a livable unit. LIVABILITY means the unit should:

• be weather and waterproof
• have working plumbing
• provide enough hot and cold running water
• have a working heating system
• have an electrical system in good working order
• be free from infestations of insects and rodents
• have sufficient trash cans
• have floors, stairways and railings in good repair
• have natural lighting in every room
• have working windows that open at least halfway or mechanical ventilation
• have safe fire or emergency exits leading to street or hallway
• have a working deadbolt lock on main entrance
• have working security devices on windows
• have working smoke detectors

The landlord/owner must return the tenant's security deposit within 21 days of regaining possession of the unit. If he/she has withheld part of the deposit, an itemized statement must be made available to the tenant.

Please contact me with any questions or concerns

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FORECLOSURE CRISIS IS ENDING

THE END IS NEAR, according to Barclay's Capital the number of foreclosures available fell to 617,000 in December, down from 845,000 in November 2008. Buyers hoping to find a "steal" on a foreclosed home are finding it more difficult because the supply is decreasing. Remember when DEMAND exceeds SUPPLY = PRICE INCREASE!!!

On a related topic, the Mortgage Bankers Association announced that there are signs that the foreclosure crisis is ending. According to Jay Brinkmann, MBA's chief economist, "The continued and sizable drop in the thirty -day delinquency rate is a concrete sign the end may be in sight..."

30-day delinquencies have been a leading indicator of foreclosures

"...[This] gives us growing confidence that the size of the problem now is about as bad as it will get."

and more good news, The Fed announced that interest rates will remain low, the Federal Reserve chair Bob Bernanke told Congress that the rates are likely to remain low for an extended period. He also stated that the economy "still requires support for recovery."

Now for those of you smart and savvy. Buyers that have purchased and qualify for the TAX CREDIT, here is what the IRS requires when filing your income tax r

eturn. You will still need to file Form 5405, however they are not demanding that all parties' signatures be on the HUD-1 settlement statement in areas where both

the buyer and seller signatures isn't common. They also ask that the buyer sign the statement before attaching to the tax return.

Now for you fortunate repeat Buyers, the IRS is seeking documentation proving residency in the previous property for five consecutive years of the the past eight years. Proof can be property tax records, home owner insurance records, or mortgage interest statements.

Please contact me for all your REAL ESTATE NEEDS

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BUY, BUY BUY!!!

Well folks you've heard it over and over again, Now is the time to buy.

According to NAR president Vicki Cox Golder, “Inventories have steadily declined and are closer to balanced levels, which indicate home prices in many areas are either stabilizing or could soon stabilize and return to normal appreciation patterns,” she said. “This means buyers still have good choices but are purchasing near the bottom of the price cycle with historically low mortgage interest rates. Throw a tax credit on top and it really doesn’t get any better for buyers with secure jobs and long-term ownership plans.” A very important thing to remember is that we don't know when we "hit bottom" until it has hit and prices rise, so don't miss the boat!

You can get more for you buck according to housing researcher Global Insight, which found housing values were about 10 percent undervalued, based on a model that examines interest rates, household incomes, population, and historical price patterns.

According to a study by Local Market Monitor for Forbes magazine, on average, housing markets on the West Coast lost the most value – 21.6 percent since their peak. Florida lost 31 percent. The Northeast lost an average of 8.6 percent, and the Midwest on average lost only 5.6 percent. Check out my FEATURED PROPERTIES!!!

Question? Comments?

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Treasury puts the "SQUEEZE" on banks, Should you STAY or should you GO, Pending sales RISE!

The Treasury plans to put the "SQUEEZE" on banks!

Yes, it's now time to play hardball Mr. Lender, Uncle Sam plans to fine you for not increasing the number of homeowners you help with modifications. Also in the works is a

published list of the worst banking offenders as well as withholding cash incentives until loan modifications are made permanent. Our government is

expecting 375,000 home owners to be eligible for permanent mortgage reductions by the end of 2009.

Should I STAY or Should I GO?

Many upside down homeowners are asking themselves this question.

Fact - a foreclosure ruins your credit score, complicates future transactions and will make it difficult to rent or buy a vehicle. Glen Kelman, chief executive at Zillow.com, believes people should consider throwing in the towel. He has said, "I think there are a lot of people who don't walk away from their house for moral reasons that are economically irrational."

Some experts believe that foreclosures will be viewed differently in this era. According to Todd J. Zywicki, a bankruptcy expert at George Mason University School of Law in Arlington, Va, "This is a once-in-a-century real estate market. The question that FICO will be asking itself is, is a foreclosure in 2008 and

2009 the same as a foreclosure in 1998, 1999 or 2003 and 2004?"

Pending sales have risen consecutively for nine months!

According to the National Associations of Realtors, contracts signed in

October, increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6.

Lawrence Yun, NAR chief economist, said home sales are experiencing a

pendulum swing. “Keep in mind that housing had been under performing over most of the past year. Based on the demographics of our growing population,

existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit

stimulus,” he said. “This means the tax credit is help

ing unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future."

Questions? Comments?

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Goals, components and benefits of the Affordable Health Care for America Act

House passes Affordable Health Care for America Act (H.R. 3962) by a VERY NARROW MARGIN - 220-215 VOTES!!!

Our house speaker Nancy Pelosi stated this had bipartisan support even though the majority of Republicans opposed the bill (only one Republican vote by Rep. Joseph Cao of LA). Thirty-nine Democrats joined the 167 Republican NAY votes. Now, the Senate needs to pass its own health-care bill, then the two bills need to be combined in some manner and voted on again. The REAL fight is just beginning...

The key goals of this bill are:

• slow the growth in out of control costs


• introduce competition into the health care marketplace in order to keep coverage affordable and insurers honest (good luck)


• protect your choice of doctor and health plan


• assure that all us Americans get access to quality, stable, affordable health care (key word "access")

It restricts insurance companies from denying coverage to anyone with a pre-existing condition or charging higher premiums based on gender or medical history. It also provides federal subsidies to those of us who cannot afford health insurance and it guarantees coverage for 96% of our citizens.

Key components include:

• Increasing choice and competition


• Giving peace of mind


• Improving quality care


• Ensuring shared responsibility


• Protecting consumers and reducing waste, fraud and abuse


• Reducing the deficit by ensuring the solvency of Medicare and Medicaid

So how do you benefit?

• Ends discrimination for pre-existing medical conditions


• No dropped coverage if you become sick


• No co-pays for preventative care


• Yearly caps on what you pay


• No caps on what insurance companies pay


• Improves focus on wellness and prevention


• Lowers costs over the long term by cutting down fraud, waste and abuse


• Strengthens medicare

Stay tuned for a breakdown of what our Senate proposes!!!

Questions? Comments?

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$8000 Home Buyer Tax Credit EXTENDED!!!

Well as we all know, last Friday our Prez signed signed into law a bill that includes an extension of the $8000 home buyer tax credit to April 30, 2010.

Expected is a 22 billion dollar contribution to our economy. More people are now eligible to take advantage of the law, which includes a $6,500 tax credit for buyers who are current home owners and have lived in their home for five of the past eight years. Also, income limits for eligible home buyers were also expanded to $125,000 for single buyers and $225,000 for couples. Qualifying home prices are capped at $800,000!

Click here to view NAR's chart of compiled facts regarding changes made to the current tax credit!!!

NAR estimates that approximately three million renters are now financially qualified to purchase a median priced home. Lawrence Yun (NAR chief economist) states, "“As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers..."

So if you are on the fence or just don't know if you qualify

GET THE FACTS

contact me and together we will see where you stand...

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Do you have a MOLD & MILDEW clause in your rental agreement?

Dear Ruben,

I am having an issue with mold and mildew in my apartment for many months and have contacted my landlord. He still has not fixed the problem stating he is too busy. What can I do? Can I withhold rent until it's fixed or get it fixed and deduct from rent?

The first thing you must do is check your rental agreement for a MOLD and MILDEW clause. Unfortunately we here in Florida have climate conducive to the growth of mold and mildew and it's necessary to provide adequate ventilation and dehumidification. The clause usually states the tenant agrees to properly ventilate and dehumidify the unit and that the landlord will not be responsible for damages to the premises or tenant's personal property due to mold and mildew.

Now, indoor air quality complaints for apartments and hotels are regulated as public lodging establishments by the Florida Department of Business and Professional Regulation's Divisions of Hotels and Restaurants. I would strongly advise you to first file a complaint with the DBPR by calling 850-487-1395 or online.

As far as your landlord's responsibilities, he is to comply with all applicable building, housing and health codes, so a complaint filed with the DBPR will start the ball rolling.

The Florida real estate law concerning withholding rent is as follows:

Providing that the lease or rental agreement is silent on the procedure of repairs and maintenance and that the responsibility is solely your landlord's you first must give written notice giving a minimum of 20 business days to complete (include an exact date to be completed). I STRONGLY suggest notice be sent certified mail with return receipt!!!
If no action is taken by the landlord, my advice would be to again give written notice by certified mail and return receipt advising the landlord that the rent is being placed with the registry of the court. This will offset eviction if your landlord chooses to evict you for non payment of rent.

Here are some links that may be of help...

Indoor Mold and Health

Tenants Rights, Laws and Protections

Good Luck and please contact me with any other questions or concerns @ RealEstatewithRuben@gmail.com


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