The Fooks Team Blog Rhode Island Real Estate News, Views, and Information

We got back from the national real estate convention with many new ideas we will use to improve our marketing plan and we are ready to go for an exciting year! We learned of some additional websites and social networks to use that will maximize the exposure of our listings. Looking forward we are expecting great things for people that want to own real estate in 2009. This market presents itself with many great opportunities to own a home or investment property. Compared to last year at this time, there are 449 fewer homes on the market (active listings October 2007- 6652, active listings October 2008-6203). Prices are becoming more in line with market value and with interest rates still low, the dream of owning a home is possible.

Our team has taken in two new listings this month and the buyer brokers have placed three into agreements. We are still waiting to hear back on two other bank owned properties that may go together. Showings on our listings have been steady even though they say this is a slow time of year. We are looking forward to a fantastic year ahead and we want to wish everyone a safe and happy Thanksgiving. Striving for Excellence!

This upcoming week from November 7-10^th Bill Fooks and Rob Petit of The Fooks Team will be attending the national real estate convention being held in Orlando, Florida. This year the theme is focused on what you need to do to stay on the road to success. In this real estate market it is very important to learn new solutions, understand the endless possibilities of this market and always grow your business. With the many changes in mortgage market and all the different options for buyers and sellers, we understand that continued learning in a changing market will keep us ahead of the curve. We will keep a positive attitude so that we can have positive outcomes for our customers and clients. I will talk to you next week with my experiences from the convention and let you know of all the exciting ideas we will have for the year. Striving for Excellence!

Last week I had called several oil companies to shop the price per gallon for home heating oil. Prices ranged from $2.69 to $3.04. Today I wanted to see what the lowest price was and again the price dropped to $2.49/gallon. That seems like a deal because in July when I filled up my tank it was $3.74. The lowest was Save On Oil Company based out of North Providence. They deliver a minimum of 150 gallons and you must pay cash. If you locked into a fixed price with an oil company you should call them and see if you can negotiate a new deal. You may have to honor your contract but it is worth the call to see if they will reconsider. You can also still receive incentives from the gas companies to convert your heating system. Right now the prices are pretty much the same unless the price of oil keeps on dropping. With the cold weather right around the corner, it would be in your best interest to secure the lowest price now. Striving for Excellence!

We here at the Fooks Team have always viewed real estate as a long term investment. Investing in stock is buying paper that can be easily reproduced as needed, allowing someone else to use your cash. Why not use your cash in a hard asset, such as real estate. This will protect your cash, and if possible, allow you to not be a tenant. Investment property should be looked at as a cash flow project. If the numbers work positively, who cares what the value is. Why believe all the hype about the market going up and down? It only moves by your control (when you buy or sell). If you stay in the house a number of years and the price and value never move, you have a built in IRA, with a lot of tax advantages. We are one of the few countries that have such an abundance of housing. Let’s keep it that way and not let anyone else control it except for ourselves.

A short sale property is generally priced at or below market value because the bank will not even look at the file until a purchase and sales agreement is sent to them. Even though the current owner signs the agreement, it is not valid until you have lien holder’s approval. This process takes some time because they need to review all the documents from the current owner to determine whether the hardship warrants an approval. Once the bank signs off, you have a binding agreement to purchase the house. The buyer of the property should invest in a home inspection prior to moving forward on the deal because the property is being sold “As Is”. With the home inspection, you will be able to justify your offer when they conduct their broker price opinion if there are any needed repairs or deficient conditions. The investment of $350 will be worth it if a problem comes up because you have the right to walk away without losing your security deposit as long as it is before the bank gives approval. If the home does not need immediate repairs, you could score yourself a nice home. Take advantage of the situation to get a good price but be sure to do your due diligence before committing.

Whether your house is listed with a Realtor or you are trying to sell it on your own, the main goal is to get the property sold. The many FSBO properties that I talk to are willing to work with buyer agents if they bring a qualified buyer and accept their offer. How are these buyers going to see their home when there is only an ad on craigslist or just a sign? We want to work with FSBO’s so we can attract the greatest number of qualified buyers to actually walk through the front door of the home. The Fooks Team 30-day marketing plan is structured to expose your property to ALL buyers. If we can net the seller what they are looking to make after all expenses (1^st or 2^nd mortgage, state tax stamps, deep preparation, commission etc) we can go ahead and do the deal. The listing period is on a month to month basis and we can review all the activity from the websites, showings, number of phone calls and any offers during that period. If we need to make an adjustment then we can discuss options, or you may take back the listing. We get paid when the house sells. We want to work with you to sell yours! Striving for Excellence!

The following are a just a few of the recent changes that have made FHA loans a more attractive option again for some consumers looking to buy a new home or refinance an existing one:

1) The FHA changed its appraisal and fee negotiating guidelines. In the past, many sellers steered clear of FHA loans because the appraisals were too strict and certain fees were non-negotiable. The FHA has greatly loosened these guidelines to make it easier for both buyers and sellers.
2) Congress passed the Stimulus Act of 2008. During the recent housing boom, home values surpassed FHA loan limits in many regions of the U.S. The recent enactment of this important legislation, however, increased FHA loan limits up to $729,500 in many high-cost regions of the U.S. through the end of the year. FHA loan limits vary in different parts of the country. 3) FHA loans are much cheaper now. Because FHA loans are federally insured, they tend to trade at a higher premium in the secondary market. This means lenders can often charge a lower rate.

Other FHA Benefits:

• FHA loans are not credit-score driven. Borrowers can have a lower score than other products and still qualify for a good rate.
  
• FHA loans require as little as 3% down.
  
• FHA loans allow down-payment assistance programs. This allows the seller to cover the buyer’s down payment and closing costs. This means borrowers, especially first-time buyers, or move-up buyers with limited funds, have a real opportunity of getting into a home with little or no cash at closing. For sellers, this means you can offer concessions that make marketing your home much more attractive without having to lower the price of your home again.
  
• FHA loans allow a) Sellers to finance all of the buyer’s costs to close; b) Homeowners to take cash out up to 95% of the home’s value; and c) Homeowners to consolidate a first and second loan up to 97% of the home’s value.
  

How a home is priced will directly impact how many buyers, showing and offers you attract. Ultimately with this market being so price sensitive, a price at fair market value will give your home a greater percentage of buyers that would view and purchase the home. In a market where prices are declining, homes are in a race against time. The best price you will get will be the price you can get now. If you wait to try and get a higher price, you could be wasting time. Waiting can and will cost you money. When you under price your home, you’ll attract a greater pool of buyers that will see the value of the home. Even in a tough market buyers know when there is a deal. Getting a full price offer and even multiple offers are still happening today. Price ahead of what the market is dictating and the results will be positive. Let me show you how to attract a greater number of buyers to your home and help you get the best price for you! Striving for Excellence!

I was looking at 3 unit multi families in Providence that have a max listing price of 100K and seventy four listings came up. Just about all the listings are owned by a bank or are soon going to be. Now I’m sure some of the properties are only worth the land alone, but not all of them. I called the listing agents for a few properties and went to see the condition of the inside. Some of the homes were missing copper pipes and another property had graffiti on the walls. There was nothing that could not be fixed though. I only picked the neighborhoods that I was familiar with so I would have a good idea of possible rents that could come in. In the Mount Pleasant neighborhood, a two bedroom apartment rents for $800-$900 a month. There is so much potential for some of these properties that I asked a few handy men to give estimates of the work that would be needed to get the houses livable again. Sure it’s a risk to get into a project like this but a partnership with a few investors allows everyone to bring something to the table and make it work. Looking 5 years down the road I can see the risk and hard work paying off. So that’s a project that I will be working on over the next few months. If you ever hear someone say they are looking for a deal, well I think I found some. Striving for Excellence!

When you purchase a home that is “subject to lien holder’s approval of a short sale,” there are a number of steps the mortgage company goes through before they accept or reject an offer. The mortgage company will review a complete package from the seller which includes a signed purchase and sales agreement from a qualified buyer. A third party appraiser who is not representing the buyer/seller or the mortgage company will be hired to complete a Broker Price Opinion (BPO). This is their professional opinion as to the current market value of the property based on recently sold homes. The BPO is usually the bottom price the bank will accept for a short sale and could result in a counter offer or a rejection if the initial offer is too low. When searching for properties that need approval from the lender, be prepared to wait several weeks before the bank responds. Most mortgage companies would rather accept less money owed on the balance than not receive any money at all. It usually results in a buyer getting a good deal on a property. Striving for Excellence!