If you sit too long on the fence, it may fall over.

As everyone knows, the housing market has faced some critical times over the last couple of years. Home values in Austin have not been so devastatingly affected as in other areas of the country but what today’s market has created is a unique opportunity for homebuyers to purchase a home at a near rock-bottom price at interest rates that hadn’t been seen in over 50 years. The bad news, is that ship is sailing away quicker than you might think. As the unemployment rate drops and the economy begins its slow recovery, you’ll see both mortgage interest rates and home values start to creep up. While this may be positive news to both home sellers and home owners, if you are in the market to purchase and are stuck on the fence, you may soon find yourself blown off the fence by increasing down payment requirements and higher interest rates. Since August of 2010, interest rates have increased nearly a full point. What this means on a typical home loan of $200,000 is a monthly payment increase of $91 or over $52,000 more over the life of the loan. Possibly of greater concern, is the possibility of the down payment requirements increasing to 5% for FHA backed loans and 30% for conventional loans. Private Mortgage Insurance (PMI) companies have already raised their minimum credit score requirements making it impossible for some people who were qualified to purchase a home two years ago to qualify today for that same loan. The point of this explanation of the mortgage market is not to instill fear into those who are thinking about purchasing a home, but rather, to help give them the extra push that they may be looking for in getting off the fence and becoming a home owner.

Visit my Austin Real Estate site for more information.

TMI = Too Much Information

As an Austin Realtor, I use technology everyday to stay in contact with my clients as well as to provide online home search tools as well as monthly real estate updates. But as our world evolves and technology plays an ever increasing role in our lives, sometimes you have to stop to ask yourself, is technology really helping or hurting me? With the majority of all cell phones now being produced and sold as “smart phones”, we literally have the world at our fingertips. You can literally do just about anything from the comfort of your car, in an elevator or even while watching a movie. I can’t tell you how many movies I’ve watched at the theatre with the annoying glow of some teenager’s cell phone while he or she is texting, tweeting or updating their online status. Also, with so much information at one’s disposal, the line between privacy and public starts to fade. Several sites such as Facebook, MySpace and Twitter have built-in privacy functions that are cumbersome and sometimes difficult to set leaving all of your private information open to anyone who wants to see it. Without thinking, people will update their status while they are on vacation or that they just made a huge purchase, leaving themselves open to professional thieves to break into their homes while they are away. Then there are those that are addicted to posting every single facet of their lives online. What they intend on eating, what they ate yesterday, the weather, the traffic report, what they were dreaming and so on. I usually end up tuning those people out quickly so as to not to get sucked into their drama or their cry for attention. The point that I am trying to make is that like all things, there is a right and a wrong way to do things. I’m not saying that my way is right, but I can tell you that no one wants to know what you had for breakfast this morning unless it’s your mother, your spouse or your doctor :)

To learn more about Austin Real Estate visit my site at www.RomeoM.com

A new year, a new set of goals

As the first days of 2011 begin, I am reminded of the goals that I accomplished over the course of the year. I am also reminded of the goals that I didn't accomplish. Though possibly difficult to believe, all of my goals are not necessarily real estate related. Don't get me wrong, I always have the long-term goal of being the most recognized name in the Austin Real Estate market, but in the short term, I have to be more realistic and more focused about the goals that I set for myself for this new year. In analyzing my victories and defeats in regards to the goals that I set out to accomplish at the beginning of last year, I find myself making a list of why I was or wasn't able to accomplish every goal I set out to complete. Some goals were probably too easy, and I shouldn't have even included them on the list, while other goals were unrealistic. I mean, did I really think that I was going to run my first marathon without training? As with any goal, it has to be specific and realistic. It has to also be time specific and measurable. In the case of my wanting run a marathon, I had those all of those parameters planned, but I never found the time to be consistent about training. The real point to my writing about goals, is to reinforce and perhaps motivate those who read my blog to plan on making 2011 a breakthrough year. Whether the goals you set are fitness, financial, family or personal goals, the important thing is to have goals and to strive to meet those goals. No one ever accomplised anything by planning to do something. Only through action and perseverance will the goals that you set, ever be realized. Unless you happen to win the lotto :)

Visit my Austin Realtor site to learn more about me and real estate in Austin.

Completing the Short Sale Purchase. Part 3 of 3

So you've stuck by your guns and patiently waited while the mortgage bank finished all of their internal evaluations, appraisal and broker price opinions and the closing date is in sight. The one thing to keep in mind with a short sale is that the transaction is not a "sure thing" even though the bank has approved the transaction. There are still some final hurdles that have nothing to do with the buyer. In some cases, as part of a short sale approval, the mortgage bank may require the seller to pay for a small portion of the loss or may want them to sign a promissory note. This can be a deal killer if the seller doesn't have the funds required or chooses not to sign a promissory note to the bank. In some cases I've had home sellers agree to pay anywhere from $500 to $15,000 depending on the type of loan and their financial position. In most cases, my clients have been granted a full and final release, but in some extreme cases where my clients may have other assets or investments in jeopardy, they may find it more beneficial to pay a small amount than to go through the legalities of the foreclosure process. In a short sale, things can change even up to the day of closing so be prepared for further delays or that the deal may go south.

As the buyer, once you've signed all of the closing paperwork at the title company and the loan has funded and you have the keys to your new home in hand, you can finally breath a sigh of relief that you've made it through the hoops and hurdles of purchasing a short sale property. For more information about short sales, please visit my Austin Short Sale page.

What to expect as the buyer of a short sale Part 2 of 3

So you’ve been hard at work with your Austin Realtor searching for the perfect piece of real estate and then one day, you find the home of your dreams at an unbelievable price! The only problem is that it is a short sale. So what does that mean to the buyer? As I’ve discussed before, a short sale is basically, when a mortgage lien holder agrees to accept less than the full amount owed on a mortgage. The seller has to qualify to put his home on the market as a short sale, but what is required of the buyer? The number one thing is PATIENCE. A short sale does not follow the normal route that a typical resale would. Even though a seller is not going to get anything out of the short sale other than salvaging a piece of their credit, they may still have some emotional attachment to their home. Try and put yourself in their shoes. They may be going through some trying times including, death, divorce or a loss of job, so they might not be at their most rational state. Some buyers, especially investors, feel that a distressed situation requires a low ball offer, kind of a “hit them while they’re down” mentality. In reality, once the seller signs off on any contract, the bank with the mortgage lien must sign off on the transaction as well and this is where your patience as the buyer will be tested. Banks may take weeks, months or in some extreme situations, even years to come to terms that they are not going to be paid in full on a mortgage loan. That translates to slow responses or even no responses to the offers that potential buyers have submitted. A good short sale listing agent will be on top of keeping all of the parties involved in the transaction informed about where the process is. One of the biggest problems that potential buyers may face, is the inexperience of the listing agent in completing short sales. Typically, only about 25% of all short sale transactions are successful, due in large part, to the inexperience and inability that most agents have in “trying” to do a short sale. Before even considering putting in an offer on a home that is a short sale, make sure to have your agent do some research on the listing agent to make sure that he or she knows what they’re doing so as to not waste your time submitting an offer that will fall on deaf ears. In most cases, having an experienced short sale buyers agent and an experience short sale listing agent involved in the transaction will increase the chances of the transaction being approved by the bank as well as cut the wait time dramatically. From a personal perspective, I’ve been able to get a short sale completed in under 30 days from start to finish.

Read my next blog post at http://www.romeom.com to learn about the final steps required to complete the short sale process.

If it is called a short sale, then why does it take so long? Part 1

This is a commonly asked question that most homebuyers stuck in the roulette wheel of a short sale ask. Five years ago, most people, including Realtors in the Austin area may have never even heard the term “short sale”, but today, it is as common a real estate term as foreclosure or bank-owned. It is difficult to understand all of the inner complexities of why a lender would choose to sell a property for less than what they are owed, but a simple explanation would be that a lender may be motivated to take a short sale loss, if they know that that loss is ultimately going to be covered by the government with one of the federally backed programs such as FHA or VA. If the home is located in an area with many foreclosures, where the lender may not be able to recover all of the costs associated with foreclosing on a property, the lender would rather sell the property short of what they are owed and cut their losses rather than gamble that there may or may not be a buyer for that particular property down the road.
So the next question might be who qualifies to “short sell” their home? Though are various reasons, the most common is:

Seller is financially strapped

- May have lost their job or a significant decrease in income
- Might be a divorce situation
- May be due to poor health and/or medical bills
- Must move due to job transfer or some other reason and cannot make up the difference between what his house can sell for and the higher amount that he owes
- Death in the family
- Many other reasons …..

Loss of equity is NOT a valid cause for a short sale

In order for the home seller to qualify for the short sale process, they basically have to go through the process of applying for a mortgage in reverse. Whereas when a borrower is trying to prove their financial worthiness to obtain a loan, a short sale seller is trying to prove to the lender that they are no longer financially capable of owning the home. Of course, if the home seller made fraudulent statements on their original loan application, all bets are off and the home seller may be liable for damages. In some cases, home sellers involved in a short sale may be encouraged to speak to a tax specialist or attorney in discussing some of the possible legal and tax liabilities that may result in the short sale of a property. All in all, it is not an easy process.

So what can a home buyer looking at possibly purchasing a short sale expect? In my next blog, I’ll describe the hurdles that the typical short sale home buyer can expect during their short sale purchase. Visit my Austin Short Sales page for more information.

Being a Realtor on Facebook without sounding like a Realtor

This is the challenge that you’re faced with when you’re an Austin Realtor and you’re competing with 9,000 other local Realtors for the same client pool. With the evolution of social media such as Facebook and Twitter, businesses, including Realtors are scrambling to take advantage of these “free” online tools to stay in contact with current clients as well as to try and attract new ones. Social media has quickly become the mainstream method of communication with 20 to 40 year olds. In fact, in a recent article, many were surprised to see that Facebook had more web traffic than even Google. The only issue with social media versus more traditional media such as television and radio is answering the question of how long will social media be fashionable? It wasn’t too long ago that MySpace was the internet’s darling. I know of several people and businesses that spent so much time developing their MySpace pages that once the site lost the internet’s favor, all of those efforts went by the waste side. Though there is no cost involved with setting up a Facebook account, it certainly isn’t “free”. You can literally get sucked into spending countless hours loading widgets, updating your status, checking out your friend’s status, their friend’s photos, planting virtual crops, watering other’s crops and even sending out “virtual” gifts. With all of the tools at your disposal, it’s difficult to not bombard your audience with so much real estate information that after a while, people start to tune you out because they think that all you ever talk about is real estate. That’s where being balanced about what you post, how often you post and what you post about comes into play. As a Realtor, I’m constantly in business mode, but I want others to know that I do have a life and interests outside of real estate. After all, social media should be sociable right?

To learn more about Austin real estate visit my Austin Realtor website.