Any FHA loans that are locked in after June 3rd 2013 will have mortgage insurance for the life of the loan. Currently, FHA mortgage insurance falls off after 5 years. That will not be the case after June 3rd.
So what does this mean for buyers and sellers?
1. If you are looking to sell May, is going to be a great time to do it because lots of buyers will be scrambling to find a home before the June 3rd deadline so that they don’t have to pay extra mortgage insurance costs. That means more desperate buyers and higher offers on your home! I expect things to cool off after this happens so don’t wait.
2. If you are looking to sell your home and buy another home with an FHA loan then you will want to start now and not waste another second. Having mortgage insurance for the life of your loan if you lived there all 30 years on a 300k home would end up costing you over 40k in extra mortgage insurance.
Call us today! Check out our 47 day home sold guarantee and call us for a free no obligation appointment to show you your options.
Update: FHA will be adding mortgage insurance for the life of the loan! But it got pushed back to June 3rd. 2013!
FHA has just announced their new changes to their loan starting April 1 2013. There are 2 changes. The first is minor. Mortgage insurance is going up from 1.25% to 1.30% (about a difference of $18 on a $200,000 loan.) The next change is MAJOR!
They will have mortgage insurance stay on the loan for the full 30 years. Currently mortgage insurance drops off after 5 years. But now it will stay on for the life of the loan. Just to put that into perspective if you had a $300,000 loan and kept it for the full 30 years then you would be paying an extra $50,000! You will want to buy sooner than later especially here in Utah since our home prices are raising fast. You will need to get an FHA case number before April 1, 2013. And you can’t get a case number unless you have a home under contract.
So contact us today and our “find it first team” and the best realtors in Utah will help y0u find your next home.
SELLERS…….
Come March their will be lots of buyers looking to get a home under contract before the april 1st deadline. If you have a home under 400k then I would strongly suggest you think about listing your home in march to catch the feeding frenzy of buyers. Contact us today 801-891-5489
Selling your home at the right time and with the right people can make a big difference. But is there a better month or season to sell your utah home?
I get this question a lot and its actually a fairly complicated but easy answer. The peak real estate selling season here in Utah is in the spring and summer. We sell more homes during that time than at any other months of the year. More buyers are looking and its a convenient time to move etc. One would natural think that spring/summer is the best time to sell, but the one variable that people forget is this. Many of your neighbors are wanting to sell during that same time too. So your competition is usually more during that season. So Spring/Summer = Lots of buyers but also = lots of sellers.
Fall/Winter are usually slower here in Utah. We don’t sell as many homes during this time but when it comes to selling your home their is a lot less competition.
So in short, it really is up to your personal preference when you want to sell. Right now in Utah we have a really low inventory, and prices are up and a lot of neighborhoods I’m seeing don’t have any “active” homes for sale. So If you put yours up for sale today then their probably is a great chance you will have 2-3 buyers fighting over your home. If you wait till spring time there may be 5-6 sellers and then your odds of getting a better offer go down.
Each situation is different and their is not a 1 size all answer that fits for everyone. So I suggest you contact us today and we will do a customized report on your situation and give you direct answers as to if its a good time to sell your Utah home.
2012 was an amazing year for Utah real estate! We have finally hit the bottom and have seen home prices, in most areas, rise by 12%.
In January 2012, I noticed that lots were selling really quickly, most getting multiple offers. As a result, prices on lots started to shoot up. To my amazement they were all still selling despite the rise of prices! I knew then and there that we had hit the bottom of our Utah real estate market and that prices would be going up. It took a few months for the news to hit the public, but by the time the word was out we were down to only a 5-month supply of homes. More and more buyers decided to get off the fence and buy; they realized they had to buy now. Because of this, inventory was low and prices were getting higher. By July we had seen a 6% increase in prices across most of Utah. This had exceeded all expectations by our local real estate board and economists and that was just the beginning.
A big reason for Utah’s increase in home prices is because of our job market. By the time you read this article our unemployment rate will probably be in the 4’s. Jobs continue to come to Utah because we are rated #1 by Forbes Magazine as “The best place to do business”. These are major companies moving here like Boeing, Adobe, and Proctor and Gamble, etc, and this list will continue to get bigger in 2013 with more companies committed.
2013 Predictions
2012 concluded with a total of a 12% home price increase in most major cities. Sales are up 18% year to date, and pending sales are up 31%. With stats like this it points to an even bigger year in 2013 for Utah. I predict that in 2013 we will see at least a 12%-18% increase in prices. With Utah’s strong job market, low prices compared to median income and low interest rates, I would say that 18% increase is a strong possibility.
If you are looking to buy in Utah then don’t wait because prices will continue to rise!
Did you know that on FHA loans…your minimum credit score only needs to be a 640? And you can get the same interest rates as a person that has an 800 credit score. But other loans do base your interest rates on your score. So if you need to raise your score for another loan to get a better rate, or you are just trying to get a 640 credit score then here are some quick tips to raise your score quickly.
Credit Scores are calculated in 5 categories. 1. Your payment history 35% (if you have paid on time etc.) 2. The amounts owed 30% (keep your balances low) 3. Length of history 15% (the length of your credit lines) 4. New Credit Lines 10% 5. Types of Credit 10% See the video for more details
Some quick fixes to raise your score.
1. Keep your Credit Card balances Low
Credit companies like to see you have big limits but no debt. So if you pay down your balances it can shoot your score up quickly!
2. Just know that if you pay off old outstanding bills that it more than likely will drop your credit score.
That’s because when you make a payment the credit companies will update your profile which will result in a negative score.
3. Check with your states Statue of Limitations.
Each state has different laws but in Utah if you have an outstanding credit card and the company doesnt have a lawsuit against you and you havent paid in 4 years then they legally cant come after you for the difference.
If you are looking to buy or sell your Utah home then please contact us.
Bank of America just released a new program available to home owners across the country including Utah. The program gives bowers who’s home loan is owned and serviced by Bank of America and opportunity to short sale their Utah home and in return they can receive between $2,500-$30,000 for relocation assistance. Yes you read right as much as $30,000!
This incentive is only available for a limited time. The short sale must be started before the end of 2012 and it must close by September 26, 2013 to be eligible.
Why is Bank of America doing this? Although B of A has not said why, it is suspected that now that they have settled the lawsuit with “providing the notes” and “auto signers” etc. they are ready to get rid of all their bad loans and start fresh.
How can a Utah home owner that needs to short sale take advantage of this? Contact us or go to our website and fill our contact form here. As you noticed in the article the bank is offering between $2,500 and $30,000 and it will be decided by a case by case basis how much the home owner will receive so you will want to make sure you contact someone that knows what they are doing and is able to negotiate the highest possible amount of relocation assistance for you.
Buying a Short Sale can be a great way to get a good deal on your next home. However short sales are also known for being huge headaches and time wasters. This guide will help you understand how to successfully buy a short sale without as much pain and disappointment.
1st. Understanding what a short sale is: A short sale is when the seller owes more than their home is worth and the bank may approve a sell of the home and accept less than what they are owed. For example if you owe $250,000 but your home is worth only $200,000. Then you are asking your bank to let you sell your home for 200k and have the bank release you of your loan.
Now you know what a short sale is, we need to look at the pros and cons of buying one.
Pros:
-Usually they are good deals and are under market value.
Cons:
-They can take a long time. Average is 3-4 months to close. (can take as long as 12 months)
-The sellers and bank usually wont fix anything that may be a problem with the home inspection or appraisal require repairs.
-The bank may reject your offer and want a much higher price
-The seller may decide not to sign at closing even if the bank did approve your offer.
-The bank may foreclose on the property before the short sale is complete.
What you and your real estate agent need to know:
1st. Your Realtor should check with the other agent to make sure they know how to do short sales.
Even if they do short sales your agent needs to follow up with them weekly and make sure the bank got the paperwork. Banks lose paperwork all the time and this is the number one mistake agents make. Because if the bank is missing paperwork then they will not start your approval process. Lots of times agents are not experienced in negotiating and handling short sales. Your Realtor can find out how experienced they are by asking a few simple questions like, “How many short sales do you do a year? Have you worked with this bank before?” etc. If the agent is not experienced and doesn’t do very many short sales than be prepared for a longer than normal wait time and a tougher sale.
2nd. Have your agent check the surrounding home sales to make sure the price is a reasonable offer for the bank to accept.
The Listing Agent and NOT the bank is who sets the price of the home and the banks aren’t dumb. If you have a $300,000 home and a price set by the agent is 150k the bank is not going to approve that. They know that its worth 300k because the will get an independent appraisal or BPO.
Since we do a lot of the BPO’s for these banks we know about what they will come in at. Even a realtor that doesnt do BPO appraisals for the bank will be able to give you a ball park estimate. If the comparable home prices are high then be prepared that the bank may counter offer you and want more money for the home.
3. Ask a lot of questions about the condition of the home and look yourself as thorough as possible so that there are no surprising appraisal required repairs or big inspection related problems..
Realtors are NOT inspectors but if they are experienced they should be able to point out a few things that need to be at least brought to your attention.
4. Have your agent find out what bank has to approve the short sale and if there is a second mortgage on the home.
Since all banks differ in the amount of time it takes them to approve a short sale you should hire an agent that is familiar with short sales because they should know about how long most banks takes to approve a short sale. This will give you an accurate time line on about how long the short sale will take.
5. When is the sale date?
Almost all short sale sellers are behind on their mortgage payments and as a result many sellers have a foreclosure sell date set where the bank will foreclosure on the Property. If this happens the short sale buyer is OUT! The home has a chance to be re listed by the bank as a foreclosure but this may take several months and prices could be higher. Have your agent find out if and when the home you want to buy has a sale date. Note that these dates can and are often extended but just be prepared because it can be foreclosed.
After looking at all these indicators with my buyers I like to give my buyers an estimated percentage chance of getting the home and about how long it may take. So for example if there is a home for sale for 250k and its worth 275k there is a pretty good chance the bank will approve 250k about a 65% chance. If my buyer wants to offer 240k then their chances of getting it for that price are now 35%. Other factors will account for the estimates but if you have a good idea before hand it will help you know if you should be prepared that the bank may want more or if you need to look for another property.
More info and definitions you NEED to know.
-“Price Subject to Third Party Approval” When you see this it means that the bank is the one that will decide the approval price and ALL short sales prices have to be approved by the bank.
-“Price Previously Approved” This means that the bank has previously approved a price and the first buyer backed out. If you offer the same previously approved price, its a pretty good chance they will accept that same price again. Sometimes you can offer lower but have your agent check w/ the listing agent because if its already a great price the listing agent/seller will not accept a lower offer because if they do it will delay the short sale further and also they know if they wait a few days they will probably get a buyer to buy at that price.
-“Accepting Back up Offers” Most Realtors will only submit one offer to the bank. This offer is not always the highest priced offer. It usually is the cleanest offer that has the best chance of approval and that will stick around. If a home you like does not have a back up offer then you could be in back up position and if the first offer backs out then your offer then gets submitted to the bank. 1st offers fall through about 30% of the time so back up offers do have a chance. But there are so many homes for sale in our market that its usually better to find another property that doesn’t have an offer, or one that just had an offer back out then to wait hoping the first offer backs out.
Can a buyer write multiple offers on short sales? In Utah they can if you use the right forms. If you live in another state can check with their local real estate agents.
Making an offer on more than 1 property is not a bad idea. But making 3 or 4 offers usually will confuse buyers further on what they really want. If you find the right property for the right price, be patient have your Realtor put in the effort to find out what your chances are of at getting the home for your offer price. If the chances are 80% or higher then stick with that one house but if chances are 50-50 or lower, then maybe a second offer on another home would be a good idea. But I recommend no more than 2 offers.
Short sales can be great buys but know that there is no way to be 100% certain if a short sale purchase will happen. So be smart, choose an agent wisely that knows your market and understands short sales and you will have a much better chance at getting a great deal without the troubles.
I hope that helps! Let me know if you have questions or need help buying or selling a Utah home!
Utah home prices are beginning to increase! *Aug 27 2012 update * In most areas home prices have increased by 5-8% so far since Jan 2012 and with more jobs coming to Utah that trend should continue. Search for homes now at http://www.RealDealUtah.com
We arent sure yet if the prices will continue to go up or if its just a trend, but every indicator that we have says that we have hit bottom and are on our way back up in utah home prices.
In the last 4 weeks in Utah and Salt Lake county we have seen almost as many homes go “under contract” as we have see become new “active” listings. That is remarkable considering we havent seen that since 2006-2007 when prices were going up by 10-15% a year. With that said, it comes down to Utah’s foreclosures and short sales. We are still high, but we have dropped by 30% since our peak. So the questions is will the demand out weigh the depreciation that each foreclosure brings? In my option its going to be close and I think it depends on where you live and what price range you are in. If you are under 250k I could honestly see you not loosing any more equity and prices could stay the same. Especially, if the foreclosures have slowed significantly in your neighborhood. If you are still in a high foreclosure area with a higher price range then you might still see that 3% loss. But the good news is we are getting closer to the bottom if we are not there yet.
(To hear more details watch the video)
Almost all foreclosures and short sales are getting multiple, multiple offers. In the fall of 2011 most foreclosures would have 3-4 offers in 2 days on them. Now the foreclosures have 10-15 offers in that same time. So the demand is there, in fact we have about a 7 months supply of homes which is not quite a buyers market nor a sellers market. So what happens with most buyers, after offering on 3 or 4 foreclosures and after loosing out to so many other people and having to over pay on the asking price by 20 k to get the home the Utah buyer gets frustrated and says, “lets buy the non foreclosure neighbors house down the street, even though its more…we are sick of this and we just want a home”. When that happens we have seen the bottom!
So, think about the stats, you usually can buy a home for 5% below market value anyway, so dont wait, but be patient, to get a good deal cause the bottom is close!
Some other things to think about:
Interest rates should stay low in the high 3′s or low 4′s. (even if utah is at the bottom, most state including the large ones need to recover before rates can be raised or they will get devastated in pricing)
