Sellers, Buyers and FHA loans

100% Financing!!!

Stated Income!!!

No Income verification!!! 

No closing costs!!!

     It was only a few years back when mortgage brokers were not only advertising these types of loans, but were actually closing them as well....  What a wonderful time for all........right? 

If it seems to good to be true...

     ..it probably is.  These loans put ALL OF US at risk and as you all know we are paying the price now - ALL OF US!!  The bailout with tax dollars, the inability of banks to redirect those T.A.R.P funds back to us, the rampant foreclosures across the Nation, the unemployment rate, the tedious and frustrating short sales.... 

These loans hurt us all

....and guess what.... They are still around!!!  AND "sponsored" by the U.S.A!!
......sort of..

FHA Loans

    FHA loans are loans guaranteed and backed by the Federal Government.  As a means to allow first time home buyers access to financing, in general they are a good idea - good for the American citizens, good for the Real Estate market - good for America.  These loans keep the market moving, and can be very helpful to qualified first time buyers.  While they do not advertise, promote or process stated income - they DO allow no closing costs and 100% financing.  It's a non-complicated system to get the 100%.  You see, FHA will allow a buyer to finance 97% of the purchase price of the home.  HOWEVER, they will also allow the seller to contribute 3% to buyer for closing costs... so what's 3 + 97 ????  Mmm Hmmmm....

     Buyers do still have to come to the table with at least 3.5% percent of value - but the loan can be 100% in essence..

Should I accept an FHA loan offer?

     There really isn't much of a reason not to, as long as you are agreeable to your sales price you are going to net the same amount regardless of the loan your buyer obtains.  You will probably see a lower escrow amount with an FHA buyer, and that can pose some risk, but if your agent stays on top of the transaction and works closely with buyers lender......all should be copacetic.

Banks love FHA loans!!

     Because the gov. is guaranteeing the loan banks truly love FHA... they pose little to no risk of repayment, if buyer defaults - ring the White House and the checks in the mail (sort of). 

They are not going anywhere

     FHA loans are here to stay - so it's best to be informed of what they are and how they work.  For a seller they are nothing to be scared of, just pay close attention to the transaction. 

In this market we are seeing more FHA loans then usual as the banks have basically tighten and tied their purse strings - it's one of the last viable options to purchase a home.

For more info on FHA loans please feel free to contact me.

Rick Rapp

Real Estate Done Right

rick@rickrapp.com

Price your home according to market conditions........Please?

How many homeowners are currently overpriced compared to market??


TO MANY!!!

People, people, people...... we are living, selling and buying in a much different time then we grew accustom to just a few years ago. With short sales. foreclosures, distressed sales, etc. we have experienced a severe depreciation effect - YES - the bubble burst....

Is that really news to anyone?

Unless you spent the past 3 years on the I.S.S it really shouldn't be... Why then, are SO many homes priced out of the market? What is the thought process here? What is the strategy?

You are wasting your time!!!!

And more importantly, you are wasting the time of others - and in turn are now contributing to the Real Estate market we are all currently experiencing.

Would you pay $5.00 for a gallon of gas?

Of course not!! Am I crazy to even ask? Unfortunately if you are overpriced for the market, buyers will have the same gut reaction as you just had.... $450,000 for this home, when the one down the street JUST closed for $290,000??? What is this guy nuts? Why is he wasting my time, does he think I'm a jerk?

You are chasing the market!!

The longer you stay priced over and above fair market value the more you waste financially and emotionally. The added stress will take its toll on you - you will start pointing fingers - start believing that this market is truly "in the dumps" and may very possibly say "just take if off the market"

You are going to quit a race that you never entered!!!

Some of the list price's I see now a days really astounds me.... I don't know if its the doing of a bad agent that is simply "buying the listing" (this means to tell a seller you can far exceed market conditions, they then list with you in hopes of obtaining false hopes).

Or is it the homeowner that's just "sticking to his guns" - if that's the case, and you are NOT WILLING to accept current fair market value for your home.....

TAKE IT OFF THE MARKET!!!!

One of my favorite quotes came from an old friend of mine, now I'm sure he heard it elsewhere but it really condenses where I am coming from.....

"Market sets price, we do not"

This is true on so many levels, whether talking about homes, cars or broccoli - pricing is set by current demand for that product....not a tough concept to grasp.


If you really want to sell in this market - if you are serious about getting to a closing table......

PRICE ACCORDINGLY

If you are unsure if you are priced correctly - or if your agent has misinformed you on fair market value.....get in the car and drive!!!

Get on Realtor.com or look in the newspaper.....or contact me directly - find all comparable properties within a 5 mile radius (there should be plenty with the inventory levels we are experiencing) and PREVIEW THEM!!!

THESE HOMES ARE YOUR DIRECT COMPETITION!!!

Compare your pricing to these specific homes.....are they "nicer" then your home? Do they have additional upgrades? More square footage? An extra bedroom, a nicer view??? If so, re evaluate where you stand price wise - it is truly in YOUR best interest....

and if your agent doesn't know what they are doing??? Get rid of them!!! It's a privilege to sell your home, not a right...



For more information or help on correctly pricing your home in this environment please feel free to contact me directly.

rick@rickrapp.com

www.RickRapp.com

Real Estate Done Right!!