July 29, 2008

Fannie Mae and Freddie Mac

A friend and colleague of mine wrote this article on his blog at www.hrodas.com. I thought it had important information and so I asked him if I could publish his post on my own blog just to make sure more people would see it.

Harry says:
Fannie Mae and Freddie Mac are the largest holders of mortgages in the United States holding about .3 trillion in mortgage debt. It is estimated that they cover more than half of the mortgages in this country.

Fannie Mae and Freddie Mac are called Government Sponsored Enterprises (GSEs) which makes them have an unusual status. They are chartered by the Federal government to provide backing to the mortgage market, however they are owned by public shareholders.

Both Fannie Mae & Freddie Mac have been in the news because they have been struggling with the mortgage problems that affected the entire nation. There have been talks about how to rescue them if they should falter too much. I recently saw an online poll on cnn.com where the majority of those voting were opposed to any government action to “save” Fannie and Freddie. I think those who voted that way do not realize the critical role they play in the mortgage industry and the economy as a whole. If they were to fail the results would be disastrous!

Proposals at the federal level have included increasing the amount of money that Fannie Mae and Freddie Mac can borrow from the Federal Reserve (at least temporarily), and also allowing the government to purchase equity in the companies to help stabilize them. Other internal measures relating to stock have been proposed by Freddie Mac. Anyone who opposes such measures is short sighted in my opinion. Buoying up these two companies is ESSENTIAL to our country and not just the real estate/mortgage industries.

Some call it a government bail out, others an economic necessity. Regardless of the names used or who is involved, Fannie Mae and Freddie Mac MUST be saved or we will feel negative consequences ripple across the entire nation. I believe they will be stabilized and that all will be well but the naysayers need to become more informed and back away from their criticism!

Filed under: Blogroll,Buying,Community,Credit & Finances,Real Estate,Selling — Susan @ 7:39 pm

July 25, 2008

Saving the Commission

Most “For Sale by Owners” decide to do it all on their own because they want to save money.  That  is an incentive that everyone can understand.  Sellers, often not realizing all that goes into a real estate transaction, put their homes up for sale by putting the familiar “For Sale by Owner” sign in the yard and they run a few ads in the classifieds.   It is so easy, anyone can do it and on a \$200,000 home, that could be an extra approx. \$12,000 they just put in their pocket!

The few buyers that are looking for a “For Sale by Owner” are thinking, “If an owner is selling without an agent, that means they are not paying a commission.  On a \$200,000 home, I should be able to knock approx. \$12,000 right off the top of the asking price.”

Most buyers do use an agent.  If they happen to find a “For Sale by Owner” home, which is typicially how most FSBOs do find a buyer…through a buyer’s agent, the FSBO usually agrees to pay the buyer’s agent’s commission of approx. 3%. 


Filed under: Blogroll,Buying,Real Estate,Selling — Susan @ 1:56 am

July 23, 2008

Open House, July 24

I will be having an Open House at my fabulous listing tomorrow, July 24, from 10:00-2:00.

If you are in the market for a great home in the $699,900 range, then come by. You wont want to miss this one.
887 High Country Drive, Orem, UT (approx. 887 East 1800 N)

Filed under: Blogroll,Buying,Community,Selling — Susan @ 11:38 am

FSBOs Not Good for Buyers


I have read a lot of articles that state reasons why selling your home on your own is a bad idea.  I recently ran across a site that had an example of why FSBOs are not a good idea for buyers. It makes a good point.

A buyer asked the question:

What happens if we don’t close by the date the offer and mortgage agreement are good till?

My boyfriend and I are buying a house. We’ve done everything needed on our end. When we put in our purchase offer, it was determined that we would close by October 3, which is the date the mortgage commitment is good until.

Right now we’re waiting for the sellers’ attorney to send our attorney the info so she can write up the title and finalize everything for the closing (our attorney said she can close within a week as long as there are no problems with the title). We found out today that the sellers and their attorney haven’t “taken care of some things” (quoting my bf, I don’t know if the attorney was more specific). Right now we’re concerned that we won’t be able to close by October 3. If closing is delayed due to the sellers’ or their attorney’s negligence in getting things prepared, what should our next step be? Do we have any legal recourse?

10 months ago

Additional Details

10 months ago

We did work with a real estate agent, we didn’t even contact a lawyer until after the purchase offer was accepted (I know it’s different in every state, in NY you have to have lawyers even if you use real estate agents).

10 months ago

How long does it usually take to get the rate lock extended (meaning, if we contacted the lender today, how long would we need to get the paperwork turned around)?

Best Answer – Chosen by Voters

While the “ask your agent” answer sounds good, if you’ve got lawyers on both ends, I’m going to assume that neither of you is working with an agent.

Which probably means that you also aren’t working with standard real estate contract forms, and the contract you folks have could say almost anything.

So, while I understand that you probably don’t want to pay for another hour or two (or more) of your lawyer’s time, that’s what you need to do.

At the same time, you should be talking to your lender to see if you can (or should) extend the interest rate lock.

Do not wait. Any delay could end up costing you a lot of money, and could potentially end up with you losing the house and everything you’ve put into the deal so far.

And not to put too fine a point on it, but this sort of thing is why folks go through real estate agents, and why “For Sale By Owner” isn’t such a good deal for the buyer.

I found this at: http://answers.yahoo.com/question/?qid=20070917140819AA7BSTC

Filed under: Blogroll,Buying,Real Estate,Selling — Susan @ 1:45 am

July 21, 2008

Cash Buyers

I occasionally get offers on my listings that are ridiculously low.  Almost always, the offer is accompanied with the phrase, “This is a cash offer” as if those are magic words which are expected to mysteriously wipe out any brains a seller may have. 

Like, ” ‘Abra Ka Dabra’ you are now so stupid you will never realize that you are giving up \$150,000 of your net worth for no good reason.”

It is true that cash offers can be more tempting because it means that there are no lenders to muddy the deal, probably the number one reason most transactions fall through.   But, I have yet to see it give any of my sellers that “deer caught in the headlights” reaction. 

One listing I had got an offer that was \$289,000 less than our asking price.   The offer came in as, “this is a cash offer” and my seller said, with a few explicatives, “Why do I care if they are paying cash or not?  Once it closes, I have my cash regardless.”   

I have had several offers in the last 6 months on several of my listings.  They have been between \$50,000 to \$90,000 below the asking price.  Not one of my sellers was even slightly tempted, not in the least bit.  I had a buyer that made an offer that was \$29,000 below the listed price.  That seller did not accept our offer and that buyer is still looking for a home. 



Filed under: Blogroll,Buying,Luxury Home Market,Real Estate,Selling — Susan @ 1:20 am

July 18, 2008

Changes to the Real Estate Purchase Contract

The state of Utah is planning to make changes to the Real Estate Purchase Contract (the REPC).  I attended a public hearing Wednesday about the proposed changes.  It was very interesting to me and even though I gave up much of my day…my birthday, I am happy I went. 

There are some proposed changes that seem to be very good and other changes that I disagree with.  The comments expressed at the meeting by different people in this industry seemed to show some of the same concerns that I have had and it was good to hear all sides of the story. 

My greatest concern is the removal of section 10.2 which is essentially a warranty from the seller that certain systems in the home will be in working order and fit for their intended purpose on the day of possession.  Things like the roof and foundation are expected not to leak, the electrical, plumbing, heating cooling, appliances and fireplaces are expected to be working when the buyer takes possession and if there is a problem, the seller must fix it or offer to sell “as-is” up front.   With the removal of this warranty, the term,
“Buyer Beware” will become more important than ever. 

There are very few states that still offer this warranty in the REPC so, I guess the thinking is, and I hate to sound like a mother, but:  “Everyone else is jumping off a cliff, does that mean we have to too”?  

Other concerns are pretty minor but still annoying.  One change is to require the CC&Rs to be included with the disclosures.  I already write-in under the disclosure section that “CC&Rs if any”  be included.  It is important that they be included but sometimes that just is not possible.  Sometimes, an HOA is so unorganized that no one has a copy of the CC&Rs anymore.  

I do not like that the negotiation period for repairs is going to be removed making it easier for buyers to cancel the contract rather than work out an acceptable solution.  There is no longer going to be a “Loan Denial Deadline“.  They plan to add an option that buyers can make an offer without Earnest money…once the offer is accepted, then there is an ambiguous ”4 day period after acceptance“…so how does a seller know the money was received? and when does it get reported as ”under contract”? 


http://forums.studentdoctor.net/showthread.php?p=6533584Warning!  Extremely personal opinion ahead!

Overall, my biggest pet peave is the removal of the explanations of remedies and procedures.  I know the contract.  I read the contract regularly and if a problem comes up, I know where to go in the contract to find the solution to the problem.  Currently, even with it spelled out in the contract, I, ridiculously and too often,  must argue with other agents about how to proceed.  I have had to go over the acting agent’s heads and talk to their brokers about contract default and correct procedures more times than I should ever have to.   I have even had to argue with brokers about their misunderstanding of the contract…

No! Let me correct that: about their failure to have ever read the contract that they are binding their clients to on a regular basis.

So, by removing all the explanations of remedies and procedures, I dread the Pandora”s Box that is going to open.  I think the reasoning behind this specific change is that there are too many agents out there that maybe should not be.  By dumbing down the contract, it makes it easier for these agents to continue to practice ineptly for longer periods of time. 

Filed under: Blogroll,Buying,Real Estate,Selling — Susan @ 1:02 pm

July 16, 2008

Utah Valley Magazine

Have you seen my articles in the Utah Valley Magazine?  I am excited about this new feature.  I hope you will read them.  I will be writing articles related to real estate, at least through the end of the year.  I would appreciate it if you could give me some feedback.  Especially, ideas on what to write about.  Thanks









The latest issue cover:

July 14, 2008

Beautiful Home

I wanted to spotlight one of my listings.  This home is absolutely beautiful.  The address is 887 High Country Drive in Orem.  This home features approx. 5410 Sq. Ft.  There are 3 spacious bedrooms on the 2nd level which includes a luxurious master suite. 

The master suite includes an oversized bedroom, newly remodeled master bath with separate tub and shower, an exercise room walk-in closet and nursery which could also be used as another walk-in closet. 

The main floor includes a very large, functional living room which opens out the back yard, a laundry room, 1/2 bath, beautiful kitchen with the most up-to-date appliances (Thermador, Bosch, Jenn-aire), and a family room off the kitchen which also opens up making your back yard and extention of your living space. 

Downstairs, there are 3 bedrooms or you could use one as a theatre room, one as a guest room and one as a living room for the mother-in-law apartment.  There is a nice kitchen, a laundry room and 1 13/4 bathrooms.  There is lots of storage in this home and a 3 car garage.  The exercise room could also be used as an office with it’s own entrance. 

Words cannot adequately describe this fabulous home and the pictures do not do it justice.  You must see it to fully appreciate how exceptional it is.  Call me to arrange a private showing of this exquisite property.  At only $699,900, you will know right away that it is priced well below market value.   Two other homes on the street were recently listed at $890,000 and $1,500,000.  Sellers are moving to California and are very motivated.   This may very well be the best value in Utah County.  Don’t let this home slip through your fingers.  Call 801-367-8214 for a private showing. 


Filed under: Real Estate — Susan @ 9:07 am

July 11, 2008

Fiduciary Duty

Utah law requires that a real estate agent have a written agreement of representation. 

           6.1.11. Failure to have written agency agreement. To avoid
           representing more than one party without the informed
           consent of all parties, principal brokers and licensees
           acting on their behalf shall have written agency 
agreements with their principals. (clients)
           The failure to define an agency relationship in writing
           will be considered unprofessional conduct and grounds
           for disciplinary action by the Division.

Getting a signed contract is easy when the agent represents the seller.  A seller wants/demands a mutual contract to spell out the terms of representation, the professional fees, etc.   

I have found though, that it is not as easy for buyers to be committed to that written agreement.  I sometimes start to feel that buyers dont want any help from agents except to unlock the door so that they can see a property.  Most buyers drive around looking for homes on their own, searching the internet for homes, on their own, then if they find an interesting home, they call the listing agent to see it.  

If they like the home and want to make an offer, then they ask the listing agent to help them write up an offer.  This is crazy.  I have written other blog posts on this issue.   Buyer’s Agent, Have Your Own

There are certain responsibilites that an agent has when a representation agreement is entered into.  I hope that explaining these fiduciary duties might alleviate some of the concerns that these buyers may have about entering into such an agreement.

          6.2.15. Fiduciary Duties. A principal broker and licensees acting on his behalf
          owe the following fiduciary duties to the principal:

 Duties of a buyer’s or lessee agent. A principal broker and licensees
          acting on his behalf who act solely on behalf of the buyer or lessee owe the buyer
          or lessee the following fiduciary duties:   ( I am going to remove the word “lessee”
          from this point since I am talking about buyers.)

               (a) Loyalty, which obligates the agent to act in the best interest of the
               buyer instead of all other interests, including the agent’s own;

               (b) Obedience, which obligates the agent to obey all lawful instructions
               from the buyer;

               (c) Full Disclosure, which obligates the agent to tell the buyer,
               all material information which the agent learns about the property or the
               seller’s or lessor’s ability to perform his obligations;

               (d) Confidentiality, which prohibits the agent from disclosing any information
               given to the agent by the buyer which would likely weaken the buyer’s bargaining
               position if it were known, unless the agent has permission from the buyer to disclose
               the information. This duty does not permit the agent to misrepresent, either
               affirmatively or by omission, the buyer’s financial condition or ability to perform;

               (e) Reasonable care and diligence;

               (f) Holding safe and accounting for all money or property entrusted to the agent; and

               (g) Any additional duties created by the agency agreement.

It really is in your best interest as a buyer to find your own agent right up front.  Traditionally, agents were needed to help find properties.  Now with the internet, buyers are finding properties on their own more and more.  It is when you find the home you want to make an offer on that it is important for you to have a professional on your side.   Buying a home is an involved process.  REALTORS® are experienced with the ups and downs of the process, they understand the problems that can arise during escrow and can help you navigate through the obstacles.    

Filed under: Blogroll,Buying,Real Estate,Selling — Susan @ 9:35 pm

July 7, 2008

More Problems with Blog

Again, I have tried to post statistics. Again, the numbers would not show up. My daughter helped me to figure out that the problem is the dollar sign. If I remove the dollar sign from the statistics, then the numbers seem to appear as planned. I apologize if this is annoying to you as you read these numbers without the clarifying dollar sign. I am probably more annoyed than you, but if I leave it off, the numbers will not show up on the blog. Sorry for the annoyance/inconvenience but I hope that these statistics might be helpful to you in understanding the current market in Utah County. Thanks

Filed under: Blogroll,Personal,Real Estate,Utah County Statistics — Susan @ 10:54 am

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