Monday, March 21, 2011

The Days Of The Instant Mortgage Pre Approval Are Over

Everyone in real estate remembers having your clients call up the mortgage company to get an instant over the phone mortgage pre-approval.  Those days are over. The lender faxed the approval to the agent and clint immediately or within a few hours. We then submitted that mortgage preapproval with the agreement of sale as proof that our clients were solid buyers and had already started down the road of financing. That and a buyer's financial showed the seller we had a mortgage in the works and had the funds to get to closing. The letter was couched in all the mortgage industry marketing language like " We are happy to be of service and now you can go out shopping for the home of your dreams assured that Happy Mortgage Company will be with you every step of the way" and lines like that.

Welcome to 2011 where the reality is the mortgage company will run a credit check on the client first to see how strong there history is and then give out mortgage advice based squarely on the client's income and recurring monthly debt and how much the buyer is able to put down on the transaction.  The full pre-approval letter will take 2 to 4 weeks to be generated after you submit the required items.

The mortgage company will require the last two years tax returns and copies of your current pay stubs, the last 3 months bank statements, and copies of any annuitys, 401k, or investment company statements. They will want a detailed list of your recurring monthly bills.

As realtors we are happy overall with these changes. Yes, it is tougher to get a mortgage for your clients but once the client gets a full pre-approval letter you have a much better chance of the transaction actually getting to settlement. The number of transactions running into mortgage problems for the buyers have grown dramatically the last year because the underwriters who must approve the loans are demanding all of the above items.  The initial contact with a mortgage company has a job and that is to bring in clients to their company. They then turn it over to a processor who gets it to the underwriter and they have the final say on the approval. 

The new mindset of the mortgage companies hurts the first time home buyers the most because they as a group had less money saved and weaker credit scores. It effects everyone though because if the first time home buyers cannot get financing the people selling their homes cannot move on with their life and change their living conditions.  People moving up to bigger homes, work transfers, estate sales, empty nesters, seniors looking for a different style of home to age in, we are all being influenced by the first time home buyer's inability to get financing. This housing recovery will continue to be weak until more financing is available.

We spoke with a mortgage  counselor the other day and they were looking for a minimum credit score of 680 and would issue a mortgage on 45% of the cash left after paying your monthly recurring bills.  A $200,000 mortgage at 5% is roughly $1,000. If you have $3000 of disposable income left after paying your recurring bills 45% of that is $1350 to work with.


FHA requires 3.5% down and will finance some of the closing costs but a traditional mortgage wants 10 to 20% down and the settlement cash also. We had clients who mortgaged 100% of the cost of the home with no money down and had a gift letter from family for the settlement cost. The lenders could not write these loans fast enough. The boom times numbers are quite different from today's reality.

So be prepared to bring all these items to the table. Have a little cash saved. Be forthright in the information you provide to your agents and mortgage company and go into the deal with your eyes wide open knowing what you need to provide.

Sunday, March 6, 2011

It's Not Your Grandmother's Lamb Tavern Anymore In Springfield Pa

Everyone around here knows the lamb tavern. It dates back to the original license applied for in 1740  http://www.lambtavern.com/CONTACTS.html  and always had the reputation as a conservative  restuarant that catered to an older clientel. The food was solid but unspectacular. Well they closed some of the areas down for a rehab while keeping the bar open and are now open for business.

We went to a food tasting there Friday night and it was quite pleasant. Our party of four were served drinks as soon as we sat down and the food was served withing 15 minutes. They have a nice selection of beer on tap, a formidable wine list and a great martini bar.

Appetizers were lobster cheese macaroni and fried calamari with a spicey asian sauce. The macaroni was delicious with large chunks of lobster in a creamy sauce and the spicy sauce dressed up the calamari which was a little dull and rubbery.

The main courses were sesame seed encrusted fresh tuna on a rice bed,  New England style pot roast on mashed potatoes with brown gravy, an alfredo pasta, and crispy fried chicken served on mashed potatoes.  Everything was delicious. Their mashed potatoes had us moaning and each dish had it's own unique attraction, whether a gravy, sauce or crust. All the dishes were excellent and we all had a sampling of each.

Desert was an apple crisp that was outstanding with ice cream on top and a creme brulee that was decent but not outstanding.  The apple was a deep dish cobbler with a crust of butter, flour and spices that went well with the vanilla ice cream.

The room we were in was not the new one but it was quiet and pleasant and our server though inexperienced was trying hard and was very pleasant and helpful.  We were served start to finish in under an hour which is my criteria for a good restuarant. They have been shut down since January and according to their site http://www.lambtavern.com/ are hiring all new staff.

Charles Pastore ( formerly of Carraba's)  was our host and he was working that room like a pro and made an effort to stop at every table and great everyone personally like old friends. He made us all feel welcome and we look forward to going back.

Wednesday, March 2, 2011

How To Get Your Home Ready To Sell In Havertown Pa.

We sell real estate in Havertown Pa and you would be amazed at how many homes do not show well. Here we will guide you through the process of making your home look clean and uncluttered so potential buyers can envision themselves in your home.

1. Concentrate on one room a day cleaning and painting it if it needs paint. Nothing helps a home shine like fresh paint.It is cheap ( home depot sells Glidden paint for $17 a gallon) and gets you a good return.  Clean and dust throughly. Put some polish or refinisher on the wood floors and shampoo the carpets.

2. Remove all the clutter in a room. Put away all those personal pictures and clear the tables of all but a couple things.  Remove one piece of furniture from a room and rearrange the furniture to maximize it's space. Open the window treatments to let in the light and have the lights on for showings.

3. Rent a storage unit and box up all the extra things you have in the cupboards, closets, basement and attic. Box up half the things in your closets so buyers will be impressed with your closet space. You want your basement, attic, and garage almost empty. Leave a few things to have a theme for each room. e.g. If your basement is unfinished clear it out. Paint the walls and floor and have a couple pieces of exercise equipment ( yes you will have to stop using them to dry clothes on ) with a small table with some bottled water on it and a few towels and a small rug or exercise mat.  You have changed your dark, drab basement into an excercise room that the buyers can appreciate.  Have just a few things in the attic to show all the space available to store things. Have the garage cleaned out and perhaps a small workbench with a few tools on a pegboard to show it as your workspace.

4. The front of your home is very important. That is the first thing buyers see.  Replace or paint that old wooden door. Paint all your exterior wood around the door.  Have some lights lining the path to your home with some flowers. Keep the flowers spaced out and remove or trim down large bushes close to the home.
Nothing dates a home like those huge evergreen type bushes or trees blocking the view of the home. Freshly mulch and clean up the whole time you are showing.

5. Walk around your home like an inspector would looking for defects. Fix all the small things you have been living with and have a professional look at the big defects.  You want to show the inspector and buyer this is a well cared for home. The imperfections are not going to go away so be proactive and deal with them early.

6. Have your dog out of the home for showings. Some buyers are fearful of dogs and will not even come in if one is loose in the home. Nothing ruins a showing more than a noisy dog barking in a cage or back yard while you are looking at a home.

7. Have pictures of your garden on display as well as a flyer depicting all the strong points.  Have a neighborhood book about the schools, local organiations, parks, playgrounds, etc on the table.

8.Most buyers are looking for a home on the web so make sure your home is listed in the realtor's multiple listing service, realtor.com, the realtor's company and personal website, zillow.com and maybe craig's list. Have some broker's opens for realtors and public opens and advertise them both on the web and with direct mailings. You are trying to get the word out and the first couple weeks of advertising are very important.

9. Most importantly price your home reasonably. Do not be the highest priced home in the neighborhood.  Look at the comps for the homes on the market but more importantly look at the settled comps to see what sellers are actually getting.  It is better to be a moderately priced home on a great street then the highest priced home on a weaker street.  Look at the competition. Have your realtor take you out to a few homes in the price range you want to be and frankly break down your home in comparison to those. Go to the open houses in your neighborhood to get tips on showing and marketing materials.

Follow these guidlines and you will vastly improve the chances of selling your home. No one wants to be sitting on the market for a year. Put some effort and a small amount of money into your home and sell it and move on with your life.

Please contact me or my wife and partner Deborah if we can guide you through this process. It is a no obligation contact. We would be happy to help you with your showings.