FHA Changes Impact Buyers
January 22nd, 2010 categories: Liberty Township, Ohio, Mason, Ohio, Real Estate Buying, Real Estate News
Recently FHA announced updated guidelinesfor financing which become effective spring. In an effort to beef up their dwindling reserves- FHA added new costs in order to obtain an FHA loan. Home-buyers with a credit score less than 580, the minimum down-payment will be 10% and for credit scores above 580, the down-payment is still 3.5%.
Up front mortgage insurance premiums will be increased from 1.75% to 2.25% for all FHA borrowers.
Seller concessions will be capped at 3%, instead of 6%.This will impact a lot of buyers who have relied on the seller to cover all the closing costs. Since the premium is increasing and seller concessions are reduced, buyers will need to bring some money to the closing table.
The changes will effect the initial cost of all FHA financed homes and will be costlier for those with a lower credit score.
Stay tuned for more details about changes.
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Can Real Estate Buyers Protect Themselves?
January 15th, 2010 categories: Cincinnati, Ohio, Real Estate Buying, West Chester, Ohio
If are currently looking to purchase real estate in greater Cincinnati and you read the article in yesterday’s Wall Street Journal ”What Home Sellers Don’t Tell Buyers”- you are probably wondering what you may be missing when you look at a home or condo.
The article offers some good information for potential buyers but in Ohio many of the “problems” are addressed through use of the Ohio Residential Property Disclosure Form and by your home inspector(s). I would like to address some of the main points discussed in the article and provide you with some resources. However before I go any further -remember real estate is like any other transaction between a buyer and seller (even though it is usually the most expensive) and if somebody sets out to intentionally deceive potential buyers the usual fix is to pursue legal action. This sometimes happens between buyers and sellers (and agents and brokerages) though the majority of the sales close without any problems.
Article highlights:
- Disclosures about any problems (form) which should be disclosed. The Ohio Property Disclosure clearly states it covers items that occurred in the last 5 years and “uncorrected problems” older than 5 years. So if the basement flooded in 1996 because of a sump pump failure and the sump was repaired or replaced stopping the problem-the owner does not have to disclose. If you have some questions-add them to contract and get answers.
- Lot size. Most Realtors rely on the dimensions provided by the County Auditor sites. If you concerned about lot lines for fencing - then either the seller and/or the buyer needs to pay for a stake survey to ensure accurate boundary lines.
- Termites-wood eating insects/pests should be a routine part of the home inspection process. The forms are fairly clear cut-there is either evidence of damage and/or active infestation or the property is clear. Sometimes inspectors find evidence of old damage-then buyers need to decide whether they want another opinion or treatment.
- Flooding- is the property in a flood zone? If yes-when was the last time it flooded? Are there any tell tale signs of water damage in lower level? For buyers with allergies this is a real problem so you if you have doubts I would suggest paying for a mold inspection. Remember if the property was flooded 10 years ago and the problem was corrected- the seller is not obligated to disclose.
- Taxes and maintenance- well taxes are also on the County Auditor sites. Most of the area utility companies will give you a 12 month rolling billing average. Obviously 2 people living with the thermostat set at 64 degrees in the winter will consume less energy than the normal homeowners. As far as home maintenance, hopefully your home inspector can tell you if the property has been well maintained. It is hard to gauge maintenance costs -I don’t know about anybody else but some years we spend a lot more on maintenance and some years we spend very little. Sort of depends on what’s happening with the property at any given time.
- Quiet neighborhoods- always good advice is too drive through the area at various times of the day and evening. I’ve had clients go back on their own and knock on neighbor’s doors with questions about area. If you are concerned about crime-contact the local police precinct.
- Pool and golf courseare planned…..make sure there are sufficient funds to build the promised amenities. Today’s economy has taken a toll on developers and builders. Their intentions may be good-but if you are buying a lot on a “golf course”-I would suggest you investigate thoroughly before assuming the course will be built. The second thing to watch out for is development in vacant areas. If the property backs up to large swatches of vacant land (unless the land is part of the development’s “green space”) nobody can promise you that retail or multi-family will not appear there in the future. If you have questions -check with the local zoning board to see what can be developed in your back or front yards.
And finally one thing the article did not hit upon- purchasing a buyer’s title insurance policy at closing.
So thanks to the Wall Street Journal for pointing out some of the rough spots for buyers- just remember to ask questions and get the answers in writing. If you have any additional questions- send me an email!
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Greater Cincinnati Housing Market
January 4th, 2010 categories: Cincinnati, Ohio, Real Estate Buying, Real Estate News, Real Estate Stats
Buyers looking at the real estate web sites with information downloaded from the Multiple Listing Service of Greater Cincinnati would see 10,091 single family homes and condos for sale in Butler, Clermont, Hamilton and Warren Counties.
A more in-depth search reflects a wide variety of listings at all price levels:
Buyers waiting to see if things get better need to take into account the “First Time Home Buyer’s Tax Credit” or the tax credit for repeat buyers. Also note that interest rates are hysterically low (note they have been artificially low for a long time) and the Fed can raise interest rates anytime.
If you are waiting for the perfect real estate storm-this might be the time to toss a line out and haul-in the benefits of low interest rates, tax credits and motivated sellers and take advantage of the current real estate market.
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Coming January 2010-New Good Faith Estimate and HUD-1
December 16th, 2009 categories: Real Estate Buying, Real Estate News, Real Estate Selling
HUD (Housing and Urban Development) has adopted a new 3 page Good Faith Estimate (GFE) as part of its RESPA reform package. The new GFE along with the new HUD-1 form goes into effect January 1, 2010.
The goal of the new Good Faith Estimate is to limit the confusion and pricing differences that borrowers were experiencing -and that is a good move. However any changes bring confusion and as lenders and other parties phase into utilizing the new forms expects some stumbles and delays -at least through the first quarter of 2010.
Normally I would be glad to answer your questions however since this is so new the government has provided a website with updated information. Best advice if you are closing on a property early next year -plan on the actual closing taking a bit longer.
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Greater Cincinnati Home Invetory Down to 2006 Levels
December 3rd, 2009 categories: Cincinnati, Ohio, First Time Buyers, Real Estate Buying
A quick check of the Multiple Listing Service of Greater Cincinnati 12,454 Active Listings (single family homes and condos). The last time we experience the number of active listings below 13,000 was in January, 2006 when we had 12,900 homes/condos on the market.
Buyers who have been house hunting for the past several months can tell you- there aren’t a lot of new listings and newly listed properties- that are priced right- are selling quickly.
The continuation of the Home Buyer Tax Credit (for first time home buyers and repeat buyers) combined with low mortgage rates provides the perfect real estate storm”. Sellers waiting for spring market-might want to reconsider and seize the opportunity to sell now.
If you need more information to make a decision-make an appointment now.
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