Kansas City North Real Estate Blog

FHA Waives 90-Day Rule For Flipped Houses

WASHINGTON - In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

"As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers," said Donovan. "FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization."

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

"This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed," Donovan said.

In today's market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

"FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties," said FHA Commissioner David H. Stevens. "This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity."

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
• The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD's website.

via portal.hud.gov

For those of you that were not aware, under the current FHA guidelines, if someone purchases a home to "FLIP" or "REHAB" or if a builder buys your current home in a trade and then wants to put it back on the market and resell it quickly, they have to wait a full 90 days before they can accept an FHA financing contract. Since most of the homes in lower price ranges today are purchased using FHA financing, this makes it difficult to efficiently flip a home in a reasonable time period. In many cases, it makes the deal to difficult to do at all so many homes do not get purchased and opportunities are lost.

Keller Williams Realty Ranked as Top Real Estate Franchise by Industry Leader and Entrepreneur Magazine

AUSTIN, TEXAS (December 21, 2009) — Keller Williams Realty joined the ranks of the top franchises in the world last week, when the company was ranked as the No. 1 real estate franchise on the 31^stAnnual Franchise 500 list by Entrepreneur magazine. During the same week, the company was also voted the Most Recognizable Brand of Real Estate Franchises for 2009 in an industry-wide survey for the Swanepoel TRENDS Report.

 

 “The Swanepoel TRENDS Report is a respected source for the real estate industry and beyond, as isEntrepreneur magazine, and we are excited to see our agents honored in this way for all of their hard work,” said Mark Willis, CEO, Keller Williams Realty. “We certainly wouldn’t have been included on either list without the dedication and resolve of our agents.”  

 

According to the ranking in Entrepreneur magazine, the most important criteria to determine the top franchises included financial strength and stability, as well as growth rate and size of the franchise system. The magazine also looked at the number of years the company has been in business and the length of time it’s been franchising, in addition to start-up costs and financial data. Additionally, Keller Williams Realty made an impressive showing on the overall list, placing higher than any other real estate franchise.

 

The Swanepoel TRENDS Report is published by Stefan Swanepoel, a real estate industry speaker and insider. The survey was crafted to determine the Most Recognizable Brand for Real Estate Franchises for his report out in February 2010. The survey included votes cast by 11,000 plus real estate agents, who cast 390,000 votes to select the top 10.

 

Earlier in the year,Keller Williams Realty also received the highest overall satisfaction ratings from home buyers among the largest full-service real estate firms from J.D. Power and Associates for the second year in a row.

 

“We are extremely proud that our associates and company are being recognized for our strength and stability during this time in our industry,” said Mary Tennant, president and COO, Keller Williams Realty. “We attribute our success to being in business with phenomenal people and to our core business models, which have allowed our franchises to thrive during any market.”

 

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About Keller Williams Realty Inc.:

Founded in 1983, Keller Williams Realty Inc. is the third-largest real estate franchise operation in the United States, with 679 offices and 73,000 associates in the United States and Canada. The company, which began franchising in 1990, has an agent-centric culture that emphasizes access to leading-edge education and promotes an economic model that rewards associates as stakeholders and partners. For more information, visit Keller Williams Realty online at (www.kw.com).

United States Housing Prices

People ask me all the time whether I think the housing market is turning around. I've personally been seeing a slight turn myself and quite honestly 2009 was the best year I've ever had in real estate, but I wanted to share this chart with you for those that don't want to take my word for it.

The above chart estimates the market value of today's median-priced house over a 40-year period.

The thick red line represents real house prices. For those unfamiliar with economic terminology, "real" prices are prices that have been adjusted for inflation. The thick blue line represents nominal house prices. The thin lines represent the pre-bubble (1970-1999) trend lines.

Notice that in the downturn of both the Inflation-adjusted house prices (thick red line) and the Nominal house prices (thick blue line) have dropped to now almost be back in line with the pre-bubble trends. Ok, yes they could go below the pre-bubble lines, but if you look at the history of this chart all the way back to 1970, the home prices do not typically drop very far below that line.

This chart tells me (as it tells most housing economists) that we are quickly moving back to a normal market. Personally, I think we'll see that happen this year.

 

Hawksbury Subdivision, Kansas City Missouri

$339,000 Grand Award Winning Avalon Plan - Seller has added upgrades like granite counters & backsplash, sprinkler system, larger patio, landscaping, and finished basement with 2nd full kitchen (stainless steel appliances). Large master bedroom with luxurious master bath. Contemporary colors and upgraded trim package. Cozy hearth room with corner fireplace off the kitchen.

Great subdivision of Hawksbury offers a short drive to Kansas City International Airport, Zona Rosa shopping, and downtown Kansas City. An upscale community of custom built homes and many prime building lots are still available. 

To see this beautiful home or to discuss building a custom home in Hawksbury, call Ron Henderson of Keller Williams Realty at 816-651-9001

Northview Place, Kansas City North Home for Sale

EVERY UPGRADE IMAGINABLE throughout this beautiful 2 story home located in the Kansas City North community of Northview Place. Very open floor-plan with the ultimate chef's kitchen that includes a $12,000 WOLF range, enormous walk-in pantry, center island and custom quartz counters. Large master bedroom w/cozy fireplace. Finished walkout basement w/family room and bar + 5th bedroom for guests or could be a office.  All this for an unbelievable asking price of only $400,000.

Full sprinkler system and $8,500 in custom landscaping. Front door security camera, custom blinds throughout, basement has 9 foot ceilings.

Seller replaced all the carpeting throughout the entire home after moving out. Very nice Friese with an upgraded pad.  This is a must see home!!

North Kansas City Schools: Northview Elementary, New Mark Middle School and Staley High School.

For a personal appointment to view this beautiful home, call Ron Henderson with Keller Williams Realty at 816-651-9001.

New Construction in Claywoods, Liberty MO

This is a brand new model home in Claywoods subdivision, Liberty Missouri built by Robertson Construction priced at $259,000.  The home offers 4 bedrooms, 2.5 baths, a three car garage and a very open floor-plan.

Clay Woods is a wonderful subdivision in Liberty, Missouri. The community currently contains 215 unique homes with lots available for custom built homes. Amenities include a community swimming pool and double tennis court, and a city maintained walking/biking path and children's play area shared with Clay Meadows subdivision.

For more information about this home, or to schedule a meeting with Jim Robertson to discuss a custom built home in Liberty, MO call Ron Henderson of Keller Williams Realty at 816-651-9001.

Obama Proposes Cash for Caulking

Obama Proposes Cash for Caulking
President Obama proposed a program Tuesday that would reimburse home owners for installing energy-efficient appliances, windows, and insulation.

Under what has been dubbed “Cash for Caulking,” home owners would get a 50 percent rebate on items like energy-efficient air conditioners, heating systems, washing machines and dryers, refrigerators, replacement windows, and insulation up to $12,000, meaning a household could spend $24,000 and get $12,000 back. There will likely be no income restrictions.

Steve Nadel, director at the American Council for an Energy-Efficient Economy, who is helping to craft the legislation, says they are contemplating having contractors or retailers pay part of the cost upfront to ease the need for home owners to come up with lots of cash.

Source: CNNMoney.com (12/08/2009)

via www.realtor.org

Home Seller's Guide: Should You Sell and Move or Remodel and Stay? : HGTV FrontDoor Real Estate

Part 1: Evaluate Your Situation

Do you really need to sell? If you love your neighborhood and just need more space, perhaps you can remodel and stay. Or if the market is slow and houses aren't selling, you may be better off waiting or renting your home out.

Whatever your reason, before you even put up the "For Sale" sign, crunch the numbers to see if it makes financial sense to sell your home. These steps will help you figure out whether you should sell or stay.

The Steps

• Step 1: Gauge your need to sell.close

  Most would-be sellers typically don't have to move. Most would-be sellers typically become unsatisfied with their homes, neighborhoods or careers and sell based on desire rather than actual need. Decide if your desire is worth the time, money and energy of selling, moving and buying again.

  As a guideline, expect to spend 15 percent or more of your home's value in this process. And depending on how much money you still owe on the mortgage, expect a large chunk of your equity -- the amount of money you've actually invested in the home -- to be eaten up.

  Before you take any action, take stock of your situation. Look at the big picture and figure out why you want to sell. Consider your options. Take our "Should You Move?" Quiz to find out what's really behind your urge to move.

via www.frontdoor.com

Green Cleaning Products for the Kitchen

Going green in the kitchen doesn’t mean going broke as long as you choose the right eco-friendly cleaners for your countertops and appliances.

From meat juices to milk spills, the kitchen can be a messy place. But don’t reach for caustic cleaners or synthetic air sprays to give your countertops and appliances a fresher feeling. Many environmentally sustainable products are just as effective at sanitizing your kitchen as conventional cleaners, and they get the job done without relying on harmful chemicals.

Not too long ago you had to scour the backroads of the Internet to find non-toxic alternatives, but no more: Many green cleaners are now available at mainstream retailers. Looks for brands such as Method, Seventh Generation, and Holy Cow. What’s more, some of the greenest of green kitchen cleaners can probably already be found in your pantry—and cost a fraction of what you’d pay for commercial cleaners, whether conventional or eco-friendly.

 

Countertops

Toss out those anti-microbial wipes and sprays when you’re cleaning your countertops. Most contain chemicals like sodium hypochlorite (bleach) or ammonium chlorides, which are listed as hazardous to the health of humans and pets by the U.S. Environmental Protection Agency, says Gary Pien, an allergist and immunologist with Summit Medical Group in Berkeley Heights, N.J. “These chemicals can cause eye and skin irritation on contact, and if mixed with other cleaning products, can release toxic gases,” Pien says.

Combine equal parts vinegar and tap water to make your own non-toxic mix. Warm it in a glass bowl in the microwave to boost cleaning power. A 64-ounce bottle of food-grade vinegar costs about $4, so it’ll set you back a buck to stir up a 32-ounce batch of homemade countertop cleaner. You won’t have to dip too far into your pocketbook to buy a greener all-purpose cleaner. A 32-ounce bottle of Seventh Generation's kitchen cleaner costs about $5, while the same size conventional cleaner costs about $4.50.

 

Refrigerators

If you have a stainless steel fridge, add a few drops of a natural dishwashing liquid such as Mrs. Meyer’s ($4.49 for 16 ounces) or Method ($4 for 25 ounces) to warm water to wipe off greasy fingerprints instead of shelling out the $7-$10 a store-bought stainless cleaner will cost. And when you’re wiping, remember stainless steel has a grain, just like wood, and you need to clean in the same direction it runs, says Mary Findley, author of “The Complete Idiot’s Guide to Green Cleaning.”

On the inside, use the tried-and-true remedy for foul fridge smells: a box of baking soda. It costs about $1. Save even more by buying baking soda in bulk: a 12-pound bag costs about $7. For sticky spills, a vinegar and water mix should clean it right up, Findley says.

 

Sinks & Drains

Liquid dishwashing soaps with bio-based ingredients like aloe and essential oils are a good bet here as well. You’ll pay a bit more than the $2-$3 the cheapest conventional soaps will cost, but when you consider this is what’s going onto the surfaces you eat off of, the potential health value outweighs the extra dollar or two. If nothing else at least skip synthetically scented cleaners, which can irritate the skin and respiratory tract, says Martin Wolf, director of research and development for Seventh Generation.

If your sink stinks, try cleaning your drain with a paste made of vinegar and baking soda. Give it time to work overnight. Drain cleaners are some of the nastiest chemicals around, and at $7 for a 32-ounce bottle, they’re not cheap. Enzyme-based cleaners like Nature’s Miracle are another option: Findley says they’ll eat away at odor-causing bacteria and any bits of food clogging the drain or disposal. Nature’s Miracle costs more at $12 for a 32-ounce bottle, but it has multiple uses beyond the kitchen. If neither approach works, sprinkle some baking soda on a halved lemon or orange and scrub out your sink basin, then toss the citrus in the disposal for a fresh scent.

 

Dishwashers

Many dishwasher detergents contain chemicals called phosphates that suck oxygen out of waterways, killing aquatic fish and plant life. Bio- and natural enzyme-based dishwasher detergents like Ecover get the job done without affecting water systems, and are comparable in cost: 25 Ecover tablets cost about $7, while 20 tablets of conventional cleaner cost about $6.50.

 

Stovetops & Ovens

Baked-on stove stains can be a real pain. “Grease-cutting” cleaners may make your stove shine, but they have decidedly less attractive health effects. Most contain glycol ethers, which Wolf says have been implicated in health problems ranging from reproductive damage to eye and respiratory-tract irritation. Instead, start by cleaning your stovetop after every meal before food bits and sauces are baked on. If you don’t, you may have to combine some elbow grease with a homemade mix of vinegar and baking soda. Prefer a green grease fighter in a bottle? Go for Holy Cow. It’s comparable to conventional cleaners at about $3 for 32 ounces.

A baking soda-vinegar paste should do the job in the oven, as well. If you can, find a natural orange-based cleaner that contains no petroleum distillates like Earth Friendly Products Orange Plus ($6 for 32 ounces). According to Findley, mixing that with baking soda can give your green oven cleaner extra oomph. Just spread the baking soda mixture in the oven, and let it sit overnight. Re-wet it in the morning. A few hours later wipe it out. It beats shelling out the $6.50 for a fume-filled chemical cleaner.

 

Microwaves

To scrub stubborn microwave stains, just grab a super-absorbent sponge, wet it, and heat it in the microwave for 30 seconds. The steam from the sponge will soften the food bits, and the hot water inside it will make it easier to wipe off and disinfect your microwave’s interior, all for the cost of a single sponge.

Alyson McNutt English has written about the joy of green cleaning for publications like Pregnancy, Conceive, and BobVila.com. She buys her baking soda and vinegar in bulk and uses them liberally for everything from disinfecting laundry to soaking up her kids’ food stains.

Treasury sets guidance to simplify short sales

By Al Yoon

NEW YORK (Reuters) - The U.S. Treasury on Monday set long-awaited guidance on a plan for mortgage companies to speed "short sales" of homes and other loan modification alternatives to stem a rising tide of foreclosures.

The Home Affordable Foreclosure Alternatives Program provides financial incentives and simplifies the procedures for completing short sales, a growing practice in which a lender agrees to accept the sale price of a home to pay off a mortgage even if the price falls short of the amount owed, according to an announcement on the Treasury's website.

Guidelines address barriers that have often sidelined short sales by setting limits on the time it takes a bank to approve an offer, freeing borrowers from debt and capping claims of subordinate lenders.

The incentives, first announced in May, expand on the government's Home Affordable Modification Program, known as HAMP, that has seen limited success in lowering payments for distressed homeowners. The Treasury earlier on Monday stepped up pressure on mortgage companies to make permanent the 650,000 trial modifications they have started.

"While HAMP program guidelines are intended to reach a broad range of at-risk borrowers, it is expected that servicers will encounter situations where they are unable to approve" or offer a modification, the Treasury said in its announcement.

Financial incentives for completing short sales or similar deed-in-lieu transactions -- in which the deed is simply transferred to the lender -- include a $1,000 payment to servicers, and a maximum of $1,000 to go to investors who sign off on payments to subordinate lien holders, the Treasury said. Borrowers would receive $1,500 in relocation expenses.

Short sales are favored by real estate agents and community groups over foreclosure because they can preserve the borrower's credit rating and leave the property in better condition than when a homeowner is evicted. While primary lenders typically realize steep losses, their recovery is typically far better than under foreclosure.

But short sales have been frustrating for borrowers and real estate agents, often hung up by negotiations with multiple lien holders and mortgage insurance companies. Real estate agents have complained that sales fall through as lenders bicker over the sales price, what they should receive from the proceeds, and whether the borrower will be held accountable for the debt in the future.

Among requirements, mortgage servicers have 10 days to approve or disapprove a request for short sale, and when done the transaction must fully release the borrower from the debt.

It also prohibits mortgage servicing companies from reducing real estate commissions on the sale, a practice that has dissuaded many agents from taking short sale listings.

In one of the most contentious issues gumming up negotiations between lenders, the guidance caps the aggregate proceeds to subordinate lien holders at $3,000.

Second lien holders in recent months have begun demanding more money from the first lender, seller, buyer or agent in exchange for releasing their claim, agents have said. Because primary lenders would face larger losses in a foreclosure, some subordinate lenders have felt empowered, the agents said.

The largest second-lien holders are Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc.

via www.reuters.com

I'M ALWAYS A LITTLE WARY WHENEVER THE GOVERNMENT GETS INVOLVED, BUT I GUESS WE'LL HAVE TO WAIT AND SEE HOW THIS ALL PLAYS OUT IN 2010. I'M GOING TO GO OUT ON A LIMB HERE AND ASSUME THERE ARE SOME LOOPHOLES THAT WILL ALLOW LENDERS TO CONTINUE DOING WHATEVER THEY WANT IN SHORT SALES.