Archive for August, 2010

Closing Killers: Unexplained Deposits

August 30, 2010

mortgage closing killersHomebuyers who are taking advantage of the great home values and historically low interest rates are finding the mortgage qualifying process much harder than ever before.

I’ve put together several stories based on real buyers from recent deals that were almost killed by the top “Closing Killers” in the market today. The names have been changed to protect the innocent.

Our first story is about a first time homebuyer couple who barely escaped the sneaky Closing Killer, “Unexplained Deposits” who is part of the Closing Killer gang led by “Opening New Credit”!

Harry and Sally were buying their first home. The house had originally sold for over $250,000. Harry and Sally were able to secure a signed contract for $134,500 with the seller paying all closing costs. They had applied for an FHA 30-year fixed rate loan, putting down only 3.5%. They only needed $4,700 for down payment and 2 months reserves of the PITI (principal, interest, taxes and insurance) payment to qualify for the loan. When they finally sent their current monthly bank statement to the mortgage processor, it showed a current balance of $16,000! Much more than what they needed to close! But wait… did this bank statement reveal a possible Closing Killer: Unexplained Deposits”? YES! (more…)

Why Should I, as a Buyer, Sign an Exclusive Buyer Brokerage Agreement?

August 23, 2010

If I am considering purchasing real estate, what are the pros and cons of selecting one agent to work with exclusively? Why not “play the field” and contact several (or even lots of) agents and have all of them scouting properties and deals for me? Why not just look around on my own? After all, I know what I’m looking for, right?

Let’s cut to the perceived “cons” of signing a Buyer Brokerage Agreement first, since they may seem obvious to most potential buyers: 

  • “If I can strike a deal working with the listing agent only, won’t I be able to save money since the seller won’t be paying a selling commission?”
  • “If I have several non-exclusive agents out looking at deals for me, won’t I get more good properties to consider? And only the agent who brings the best property to me will be paid; that’s fair, right?”
  • “I would be promising to ONLY look at properties with my exclusive agent. What if he/she isn’t available when I want to look?”

Will I really save money by dealing directly with the seller’s listing agent? Overwhelmingly, no.  That listing agent realizes that he/she will earn every penny of both the listing AND selling commission since they will be solely responsible for seeing the entire deal through to closing. And I have absolutely no power or standing whatsoever to renegotiate the commission agreement already signed between the listing broker and the seller since I am not a party to that agreement. It’s none of my business and some listing agents may even tell me so. Unrepresented buyers like me, in addition to needing much more “hand-holding” than I ever believe I actually will, are also placing ourselves in a position of “spilling our guts” to the listing agent, only to find out later that the listing agent MUST report any pertinent information to his/her CLIENT, the seller. What I say can and will be used against me during the negotiations and at the closing table. Ouch! (more…)

Five Steps to Self Motivation

August 16, 2010

If you listened to the last broadcast of The Real Estate Insider on BlogTalkRadio, we began a discussion on “self motivation”.

How do you push your own buttons? What do you do to motivate yourself?

So in the fashion of David Letterman’s Top 10… we’ll start with number #5 first.

5. “Change who you are first”. Have you ever caught yourself looking to change those around you… it never works (I thought I was going to change the world – not going to work).

4. “Crisis inspires our best efforts”. I’m sure you’ve watched 24 (starring Jack Bauer). I was watching an episode and heard a line in the show that summarizes this point… “Stress is the fertilizer for creativity”. (more…)

DeKalb County Approves Foreclosure Registry – Agents Be Prepared!

August 9, 2010

Connie Stokes, a DeKalb County Commissioner AND a Georgia real estate licensee has proposed and gotten passed an ordinance called the “Foreclosed Registry Program” requiring that all VACANT FORECLOSED properties in DeKalb County be registered with the county at an annual fee of $155 (in the written copy of the ordinance I obtained) or $175 (as reported in the Atlanta Journal Constitution) beginning in 90 days (exact date not published, but the ordinance was passed on July 27, 2010).

Supposedly, this is to stress to owners of foreclosed properties (typically banks) the requirement to maintain and secure these vacant properties in order to “prevent blight, decreased property values and crime”. As desirable as these outcomes appear, this effort is extremely burdensome on Ms. Stokes’ fellow real estate agents, and will place real estate agents squarely in the line of fire from the public and code enforcement when banks won’t or don’t attend to their properties and will “stigmatize” otherwise normal properties.  (more…)

Military Homeowner’s Assistance Program (HAP)

August 2, 2010

Military Home Owner Assistance ProgramMilitary personnel and federal employees who are “under water” with their mortgage can benefit from a program by the Department of Defense that is administered by the US Army Corps of Engineers under the Base Closure Act known as HAP (Homeowner’s Assistance Program). This program was extended under the American Recovery and Reinvestment Act of 2009. For full information, go to

This program was originally designed to apply to members of the military or federal employees who owned a principal residence in an area where a base closure or realignment caused the values of the homes to decline. (more…)