Category Archives: Home Buying

Welcome to Single Property Websites

Single property websites, now live and only on NRVLiving.com!

The video below talks about the site, how it’s laid out, and what buyers – and sellers – can expect to find.  I’ll be working on NRVLiving.com/Properties over the next couple of weeks to finish things up, but I was so excited about getting this going that I had to share.

Several people I’ve shown this to have asked the same thing – “what’s the point?”. One of my goals in real estate is to provide as much information as possible to buyers and sellers alike, and as home buyers are out riding around I want them to have the things they want to know at their fingertips.  That’s why the signs were redesigned, and now – with just a web-enabled cell phone, they can find out even more.

NRVLiving Real Estate – maybe the tagline should be modified to read “Transparent AND Simplified.”

Dave Ramsey Tells You Whether He’d Use A Real Estate Agent Or Not

Dave Ramsey, the guru of getting out of debt, talks a lot on his show about ways to avoid paying unnecessary fees and penalties, and encourages people to save far more than they spend – novel concept, right?

He had a question on his show in October, that a couple of people who listen regularly heard and sent me a link.  The question had to deal with whether or not to use a real estate agent to sell a home.  Economically, that makes sense – a $200000 home with no mortgage is going to net the owner ~ $200000 (minus closing costs, of course), while that same house will net the owner less if they use a real estate agent.  Dave’s take?  You get what you pay for (5 minute listen):

Dave Ramsey – 10/28/09 Show

What the Buyer Credit Extension Means for New River Valley Home Sales

The tax credit extension has been signed into law, and now people far and wide are wondering if it’ll create a Monopoly-like run on buying properties and collecting checks.

2988469720_3b28068648I was thinking today about how the tax credit extension might affect home buyers in the New River Valley, and I’ve come to the conclusion that there really is no clear answer to that.  I know that I’ve worked with a lot of first-time buyers this year, and several of them have said that they would not have purchased if the $8000 was not available to them.  For that reason, I know that it had an impact in our area – but that credit was limited to just first-time buyers.  This new credit, signed by the President on Friday, provides for up to $8000 for new homeowners, and up to $6500 for people who are changing homes (some restrictions apply).  With the stroke of a pen, we’ve opened up pretty substantial credits to the entire real estate buying market.  Will it take?

Do not pass Go, do not collect $200.  I don’t think so.  I’m not trying to be the pessimist, I just don’t think $6500 is going to make someone decide to buy a new house.  It will certainly help those who have sold their homes and are looking for new ones, but they would have been looking anyhow so the $6500 is just a nice little Christmas bonus.  Overall though, I think we’re likely to look at the extension after it’s expiration date in 2010 and say that the $8000 tax credit for first-time buyers continued to be well utilized, but that the “move-up” component of the extension didn’t hit a home run.

My two cents … that’s why they pay me the big bucks to write this blog. 🙂

What do you think?  Will the extension in its’ new form have an impact, or will buyers still buy simply because they needed to buy anyhow?

Photo from woodleywonderworks.

First-Time Buyer in Pulaski VA? There’s $1 million Available For You

That’s right, $1 million has been set aside to help first-time buyers ease into the Pulaski VA real estate market.  From WSLS.com:

The Virginia Housing Development Authority has set aside $1 million for the town of Pulaski for a reduced interest rate housing program.

Home buyers who qualify for the loan will receive a one half percent reduction in the standard VHDA interest rate.

To qualify, households must have an income between $34,500 and $46,000.

“A lot of people are looking for housing already and this just gives them a chance to get a reduced interest rate,“ said Pulaski Town Manager John Hawley.

As part of the program, the town will pay for the home inspection and waive any building permit fees.

Here’s a look at the complete news release from the town of Pulaski:

The Virginia Housing Development Authority (VHDA) recently notified the Town of Pulaski that it has been selected to receive a set-aside (reservation of funds) for the SPARC program (Sponsoring Partnerships and Revitalizing Communities).  These funds will be available until June 30, 2010.

The SPARC loan is a program that reserves funds for localities and organizations to promote affordable housing to first-time home buyers.  Homebuyers who qualify for a SPARC loan receive ½% (one half percent) reduction in the standard VHDA interest rate for first-time homebuyers.  The Town of Pulaski for Round 8 currently has $1,000,000 (one million dollars) reserved by VHDA at the ½% reduction.  A citizen who is interested in buying or building a home in the Town of Pulaski may want to consider applying for a SPARC loan through one of the VHDA approved lenders.

The Town has targeted households with an income between $34,500 and $46,000 to receive the ½% reduction in their mortgage.  As part of the program, the Town will cover the cost of the required home inspection and waive any building permit fees. Connection fees for new construction will be waived.  Houses may be purchased or built up to $225,100.

If someone is interested in this opportunity, they should work with an approved VHDA lender.  The following three have agreed to work with the Town or you may check with your lender:  Suntrust Mortgage, Bank of America and Stellar One; or contact the Town of Pulaski Managers Office at 994-8600.

So what would $225100 get you in the Town of Pulaski?  A lot.  There are currently 74 homes on the market in the Town in that price range, and the median list price is $119500.  If you qualified, with a 1/2% interest rate reduction, a home inspection paid for, and an $8000 first-time buyer tax credit from the federal government, there’s a lot of money to be saved.  Let me know if you’d like more details.

How To Apply For The First-Time Buyer Credit

I had a teacher in high school, Mr. Smith, who had a saying that’s stuck with me.  I remember little from his government and US history class but this phrase:

Porkchop porkchop greasy greasy, man that test was easy easy!

Why do I remember that?  Who knows.  But it was the first thing I thought of when I found the form first-time buyers need to recoup their tax credit in 2009.  Finally, something government-related is easy – Mr. Smith would be so proud.

The first-time buyer credit is set to expire a month from now, assuming the White House doesn’t extend it in some way, shape or form.  See that ticker on the right side of the screen?  If you haven’t gone under contract on your first home by October 30th, you’re likely going to miss the expiration of the first-time buyer credit.

Plenty of people (350000, according to NAR), including many right here in the New River Valley, have taken advantage of the credit so far in 2009, and some of my clients have already reported receiving their credit.  It’s pretty easy to do, so get on it.

Is The Real Estate Glass Half Full Or Half Empty

2767938103_530e7206b2The all time closing high of the S&P 500 was 2 years ago, when in October of 2007 it closed at 1565.  On Friday, October 9 2009, the S&P closed at 1071, 32% lower than the all time high just 2 years earlier.  HOWEVER … IT IS 58% HIGHER THAN THE 3/9/09 BEAR MARKET LOW CLOSE.

We are always looking to the positive or negative and this is no different as some individuals are still talking about the 2007 market.  We really can be thankful of the turn around since March, and the same is true with rates.  Everyone is talking about how easy it was to get a mortgage 2 years ago and the process was so much smoother.  Well today rates are at historic lows, there are still mortgage programs available and home prices are at the lowest point in years.  Did I mention if you are a first time buyer you get $8k just for buying a home that in several cases can be purchased with no money down?

I leave you with some words from Warren Buffett “be fearful when others are greedy and be greedy when others are fearful”.

Photo from kjarrett on Flickr.

Brandon Nicely

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Brandon is a branch partner at Alcova Mortgage.  He enjoys doing his taxes, firewalking and competitive eating, but not necessarily in that order.  You can reach him at brandon@alcovamortgage.com, or 877-552-7150.

What’s a Good Faith Estimate?

Oh hello … there’s a blog here under all these cobwebs.  Been a while since I’ve been here.

Sorry about that, but maybe you didn’t notice.

I was working with some folks on Monday and suggested that as part of the pre-approval process, we get a Good Faith Estimate from the lender.  They looked at me and said, “what’s a Good Faith Estimate”?  Settle in …

A Good Faith Estimate (GFE) is an estimate that’s provided by a lender, to a borrower, that estimates the closing costs for a particular transaction.  The estimate is provided within three days of loan application, and is required by law according to the Real Estate Settlement and Procedures Act.  In some cases, the closing costs can vary wildly, but in my experience most local lenders can do a good job of getting it very, very close.  Nevertheless, the Good Faith Estimate is just that – an estimate.  Regardless of whether it’s an estimate or not, the GFE should document to the penny every cost associated with the transaction.

Only a lender can provide you a GFE, but one in particular has gone even further.  Brandon Nicely, of Alcova Mortgage, has allowed me to share a closing cost calculator with you.  It’s currently in Excel format so if anyone knows how I can upload the file and its related formulas to WordPress, please let me know.  Otherwise, if you’d like me to email it to you, just send me a note and I’ll gladly send it along.

It Takes More Than Just a Good Name To Get A Loan

Seems like this would’ve been a good idea all along (from Marianne Lane, Coldwell Banker Mortgage):

Lenders will now be required to independently obtain a phone number and address for the Borrowers employer (via Website, Phone Book, Etc).  
If the borrower is self-employed, in addition to verifying the business’s existence on the web or phone book, we will be required to verify the existence of the borrower’s business within 30 days prior to the note date from a third party, such as a CPA, regulatory agency, or the applicable licensing bureau.   This information must be verified by a 3rd party and cannot be verified with the borrower directly.

What if a company is not listed in a phone book – or (hard to believe but true) not found on the web?  How is the self-employed borrower then verified?

It was always a tad more difficult to get a loan as a self-employed borrower, but be prepared for it to get even tighter – here are the tips on convincing suppliers that your business is credit worthy.

From A To Regulation Z

Ever heard of Regulation Z?  No?  How about Truth In Lending?  Still nothing?

That’s okay – I’d be willing to bet most agents haven’t even heard of Regulation Z (sounds top secret, doesn’t it?).  Nevertheless, I received information from a mortgage professional, Tom Vanderwell, that I thought important enough it needed to be shared here.  Tom, thanks for sending me this.

First, some background.

Regulation Z is a component of a larger Act, called the Truth in Lending Act (or TILA).  The Truth in Lending Act was established in the late 1960’s to provide full disclosure of the terms and costs associated with a loan.  Ironic given today’s sub-prime mess, right? That’s for another post.  Anyway, Regulation Z is a component of TILA that essentially involves the meat of the Act, and so TILA is often referred to as Regulation Z … there, you’re up to speed.

So as of July 30 2009, there have been some pretty significant changes to Regulation Z that lenders, REALTORS and consumers should be aware of.  The changes are meant to open up the loan process for consumers, giving them the opportunity to shop for the best loan terms and avoid excessive fees.  It could be argued that real estate agents – and mortgage brokers – should have been providing a clear picture of the costs associated with a loan all along, but since that hasn’t happened we’ve got more legislation to take care of that for us.

But that’s for another post, as well.

The new changes to Regulation Z include:

  • when rates change by as little as .125% on some loans, re-disclosure to the consumer is required.  This re-disclosure will mean an additional 6-day waiting period for closing.
  • once the Truth in Lending statement is provided, there is a required 7-business day wait before closing can occur.
  • the loan process is entirely in limbo until the disclosure and terms is signed by the borrower – no loan approval, no appraisal, no nothing.

All of that makes sense, of course – a borrower should know what the costs are going to be when the rate moves up (or down), and there shouldn’t be any undue pressure on the borrower to accept a loan “because the appraisal’s already been done” or some nonsense like that.  Where borrowers – and their agents – need to be aware is in the newly implemented time frames.  Essentially, we’ve put in controls that prevent closings from being rushed through before buyers have the time to get their wits about them.  If you’re accustomed to a quick closing – say, two weeks or less – you can kiss that goodbye; closing time frames of 30-45 will be the norm, I think.

Overall, I think the proposed changes to Regulation Z are a good thing.  FULL, unbiased disclosure can’t hurt anyone.  But I do have to wonder if it’s all too little, too late.  Why weren’t these controls in place years ago?

The Ferrari vs. The Yugo, Part Two

Warning: This is a long post (2034 words, to be exact), so skip ahead to the end if you’re not interested.  It deals with an issue that’s central not only to the success of a New River Valley real estate agent, but also to a buyer or seller who’s relying on their agent to provide concise, well-formatted information in a timely manner.

On Monday, I brought up the issue of The Ferrari vs. The Yugo, and this is the follow-up.  The following is a reprint of Sunday’s article in The Roanoke Times entitled “NRV Real Estate Community Weighs In On The New MLS System“, written by Sarah Cox.  Please read the article to the end, where I’ve posted some thoughts:

The new Multiple Listing Service (MLS system for members of the New River Valley Association of REALTORS has arrived.  Produced by Rapattoni, it replaces flexMLS, which the NRVAR has had under contract.

If there has been concern about the change in MLS systems, it is because REALTORS rely on the MLS as one of the main sources of data.  These systems produce data so that REALTORS can price houses accurately; provide current sales information; and generate sales sheets for client information.

It is not unusual for real estate associations to constantly upgrade their MLS systems – this is the sixth or seventh one that the NRVAR has had, according to REALTOR Vicki Powell.

“It’s always the belief that if you are going to make a purchase of that size that it will be a great improvement; it’s kind of like buying a computer – it should be cheaper and faster than the last model.  That’s why we’re concerned.  With every MLS system, there is a learning curve … but a large portion of the association believes that a mistake has been made.”

As with most issues, there are two sides.  According to Bart Castleberry, chairman of the MLS committee, his group had been previewing the flexMLS system for the last year-and-a-half in addition to looking at other systems.

“We have never stopped looking for ways to improve and advance.  We wanted to have more features and we had a major security issue.  We had instances of people sharing their passwords,” said Castleberry.

Nick Rapattoni of Rapattoni, Inc., said this new system provides a secure log-on solution using a two-factor identification authentication that moves away from a physical token toward a non-token-based system.

“This is the same technology as used by a financial institution,” said Castleberry.  “It is called adaptive authentication.  The NRVAR is an MLS with 600 members and some were sharing their passwords to decrease dues; we have had about an 18 percent increase in dues in systems we sold Rapattoni to.  Passwords are also shared with lenders, clients, and other REALTORS – this is sharing intellectual property.”

Charles Burnette, president of the board of directors of the NRVAR, said the listings with the new MLS system will be more accurate and up-to-date.  Castleberry added that the data is now “cleaner, more accurate and easier to search.  We couldn’t select a date range with Flex, just a 24-hour hot sheet.”

Burnette pointed out that the NRVAR covers nine counties and two cities, and the new MLS system allows members to automate their data information.

The words “learning curve” have been used quite a bit, but according to both Jeremy Hart, a REALTOR with NRVLiving/Coldwell Banker Townside, and Steve Ayers, a REALTOR with Coldwell Banker Townside, that is not the main issue.  Rapattoni is not MAC-compatible; it is Internet Explorer-based.

Ayers, who designed the telephone system for James Madison University, the original 911 system for the Town of Blacksburg, and worked for Universal Communications Systems, said:  “Most systems today want to be browser independent, and realistically, even platform and operating system independent.  You really want an application to run on any device, anywhere, to maximize your reach, because devices are changing rapidly.

“We have graduated from big laptops to hand-helds, and most companies are trying to design their applications to run on all those devices and be platform independent.  Internet Explorer has a market share of 66 percent and falling.  Unfortunately, Rapattoni and their technology necessitate Internet Explorer on the agent side to function, so right off the bat, you are restricted in terms of modern browsers.”

However, said Rapattoni, the company is not only working toward their system becoming compatible with Firefox, but they are providing two ways for Mac users to access the data.

One is through Citrix, a free software program that comes with Rapattoni software.  It allows agents to remotely access a server in real time.  The problem with this, pointed out Hart, is that it is slower.

The second solution is to download Windows and a Windows-compatible software program, such as VMWare, onto a Mac.  These packages, which cost about $150, were offered by Rapattoni to the NRVAR agents for free, but Rapattoni said as of the end of May, there has only been one taker.

Ayers confirmed that there are several solutions to Mac users, but none really meets the forward thinking of being browser independent.  The inherent disadvantage of Citrix, he said, is dependent on what kind of tunnel you have established – a speed hit.

“It’s not as transparent with other applications – cut and paste doesn’t work the same … it will work, but you wouldn’t want it to be your primary methodology.”

He also pointed out that because the area is a university community, it makes it more susceptible to viruses, worms and spyware.  That is why many people have switched to Firefox, he added.

“In terms of market share, they have basically chosen a system that one-quarter of the people have to do something different, and this is during a busy time of real state season.  You have REALTORS with a broad range of technology skills – some are still struggling with basics of computers, others are doing stuff at the leading edge, but you have to train for everybody,” said Ayers.

Rapattoni contended that their system is a lot more flexible.  Castleberry said that the data is cleaner, more accurate and easier to search.

“We couldn’t select a date range with flex, just a 24-hour hot sheet,” he pointed out.  “I am very excited about the switch.  You can access public records now, even transactions from one family member to another.”

Michael Wurzer, president of FBS, which produces the flex system, said flex provides the full suite of features to the New River Valley MLS.

He said his company’s flexMLS web system allows agents to deliver the MLS listings to their customers with “unlimited high-resolution photos, interactive maps, market statistics, detailed property histories, disclosure documents, open house information and much more.  With our customer portals, agents can better understand the listings their customers like, view their search activity, and interact with them through our messaging system.”

How does the discussion affect the buying and selling public?

Ayers pointed out that, in the long run, the MLS is a significant part of the REALTOR’s strength in doing his or her job.

“It is our knowledge,” he said.

This particular learning curve may take longer than others, but the goal of the NRVAR board, the MLS committee and REALTORS, is to give the public the best information possible.

The landscape in this market has changed – REALTORS now have to be more competitive, market themselves in an efficient way, position houses to sell and be faster with their response times.  The debate over flexMLS and Rapattoni system would seem to be a symptom of this increased stress to remain competitive.

I appreciate Sarah Cox covering this story, and knowing Sarah there was a LOT of effort on her part to get the scope of the story.  Unfortunately, I think she missed the real meat of the issue.  The board is correct … sharing of passwords to the MLS is reckless, and they needed to crack down on that.  But what they frame as a “security risk” did not necessitate pulling me out of my red Ferrari and dropping me into a Yugo.  The Ferrari was running just fine, thank you very much.

See, I always found flexMLS to be a tremendous product.  Prior to flexMLS, the NRVAR was using another vendor, and that was the system that I started on when I first became an agent.  I remember it being cumbersome and limited, but it was what I had and what I knew and so I made it work; I didn’t know how good or bad an MLS software program could be.  When we switched to flexMLS I found out, because it could do a lot of what I needed it to, and the developer was constantly tweaking and upgrading the system to include even more features.  The Ferrari was really humming!  But there were also some things it couldn’t do, because decisions had been made by NRVAR to leave certain features off.  Again I ask the question – why not use the Ferrari to do what it’s supposed to do?

It’s incorrectly stated in the article above that our old system didn’t allow you to search by date.  Completely and totally incorrect.  I still have access to our old system, and it still allows you to search by date.  On the main search screen there were two places to enter dates, and you could search based on those dates and various other criteria.  It’s also incorrectly stated that the information is “cleaner and easier to search”, which in my personal experience I’ve found to be completely the opposite.  When I print out a listing to hand to a client, the information contained on the detail sheet is never in the same place twice.  The reason for this is that it depends on what information an agent puts into the listing when it’s first entered, and the rationale for this is I have no clue.  Instead of being able to quickly show a client where to look on the detail sheet for particular data, now both client AND agent are staring at the page, together, scanning and trying to locate it.

Again, I appreciate Sarah’s coverage of the issue, but I think she missed the mark.  The fact that Mac-users are forced to use two methods of logins that are unstable has nothing to do with my frustration … well, has little to do with my frustration.  I’ve used both methods, and both have caused me major issues – frequent lockdowns, tremendous slowdowns in processor speed, the inability to save my work … how can I quickly and effectively work for a client to get their offer in first if I can’t even get into the system?.  No, it’s not a Mac issue at all.  And it’s not about increased stress in a competitive marketplace – honestly, I don’t care about the competition.  I care about NRVLiving and Jeremy Hart, and I know if I focus on doing right by my clients I’m just fine.  No, it’s not about those things at all.  Steve Ayers hit the nail on the head when he stated that “you wouldn’t want it to be your primary methodology.”

Bingo.  Yahtzee.  You sank my battleship.

You might think all this sniping back and forth is tiresome, and you’re right.  It is.  But it’s important, because the members of NRVAR are working through a very important issue right now, and it hits home with every buyer and seller of real estate in the New River Valley.  I don’t know what the exact numbers are, but I’d be willing to be that nearly 40% of our membership right now is frustrated with the product we’ve been handed, and they’re making their voices heard.  If it brings about change in the technology we use, great.  If it doesn’t, that’s disappointing, because our association and our clients lose.  That’s the core of the issue – our MLS committee got this one wrong, I’m afraid, and no one wants to admit it.  It’s okay to be wrong, I do it every day and still get to sleep at night.  But we need to look at where we missed the boat, and how we fix it before we permanently damage our standing as professionals in our community.

And to Rapattoni?  I’m 32, male, and I want my Ferrari back.