Monday, January 31, 2011

18 Questions to Ask A Real Estate Agent while Interviewing

If you are looking to buy or sell a home, you’ll probably want to not only find the best agent for your needs, but one with integrity and one that knows the ropes. They don’t have to be your best friend, but they should be someone that you genuinely like—because you’ll be spending a lot of time with them.

Start with recommendations from family and friends. Ask what they liked about them. What they didn’t like. And then take it one step further— spend about 30-45 minutes and ask them these questions!
  1. How long have you been selling residential real estate?
  2. Is it your full time job?
  3. What are your credentials?
  4. What other type of real estate training courses have you had?
  5. How many homes did you sell last year?
  6. How many buyers did you represent?
  7. What’s the average time to sell a home? (if listing your home for sale)
  8. How do you plan to market my home for sale?
  9. What’s the average time it took you to sell your listings?
  10. What’s the average time you spend with someone buying a home (if buying)?
  11. How close to the asking price, versus the sales price, are you able to negotiate (both for buyers and sellers)?
  12. Will you represent me exclusively (if you are a buyer)?
  13. How many lenders do you work with (if you need a mortgage)?
  14. Why do you like working with these lenders?
  15. What other service providers do you work with?
  16. Do you get any compensation when you refer them to me?
  17. How will you communicate with me?
  18. How often should I expect to hear from you?
Just a couple of things to keep in mind! Experience is not a guarantee that the person is successful. Ask additional questions if you don’t understand the answers. Ask for references. Make the telephone calls. And before you buy or sell your home, by all means get pre-approved ahead of time.

Monday, January 24, 2011

5 Mortgage Qualifying Red Flags You Need to Know Before House Shopping!

What’s the first thing you do when you start working with a client? You ask the area, the type of home, the price range, etc. Next, you probably ask about their family, their employment and if they have been pre-qualified for a mortgage loan.

There are 5 mortgage qualifying situations that we have to be familiar with when looking at Rental Property or even homes.  Good Agents don't want to waste your time showing you homes, so tell them up front!
  • Self-Employed Clients – A person is considered “self-employed” if they own 25% or more of any business. This includes partnerships and LLCs. Not only do I need 2 years’ tax returns, I have to have them sign a form, that’s sent to the IRS to verify the numbers. The red flags here are when someone says they have filed an extension—or they state they “don’t show all of their income” – or they “write off” all their expenses—and show no income.
  • Divorced/Previously Divorced – Going thru a divorce can wreak havoc on a person’s credit. But more often than not, it’s the “joint debts” that still show up on the credit report that becomes a problem.  This is especially true if the person had a mortgage with their ex-spouse and has not been released of liability. We will have to prove (with canceled checks) that the ex is paying the payments on time.
  • Job-Hopping Clients – It’s not a bad thing if they change jobs, within the same industry, with very little time off between jobs. It shows a lack of “job stability” if a person hops from job to job or working for a “temp agency”.
  • Foreclosure, Short Sale, Deed in Lieu – Simply put, there are pre-determined “waiting periods” before your clients can apply for a mortgage. There are shorter waiting periods for those who have had a short sale or deed in lieu (versus a full foreclosure), but the shorter the waiting period, the more money they’ll need for a down payment.
  • Bankruptcy – Waiting periods apply here too, but it depends upon which “chapter of the bankruptcy code” they filed under. The bankruptcy has to have been “discharged” and all the paperwork, including a schedule of debts is needed for me to review. There are extenuating circumstances (medical, death of a spouse) which allows a shorter period of time—but divorce or job loss is not considered an extenuating circumstance.

Monday, January 17, 2011

Four things that will keep the Housing Market from Change in 2011!

As the new year gets underway, there are four housing issues consumers should keep a close eye on: Jobs, Foreclosure Delays, Washington, and Lending Standards and Rates.
  • Jobs: If the job market improves, the demand for housing picks up, and many other challenges facing the housing market can more easily take care of themselves. However, if it doesn’t, home prices will decline further, and more homeowners will fall underwater.
  • Foreclosure Delays: In September 2010, some of the nation’s largest lenders suspended foreclosures due to potentially fraudulent document-handling procedures. Regulators and state prosecutors have launched a series of reviews, and investigations could shed more light on abuses, such as misapplied or excessive fees by servicers, their attorneys, or other third-party vendors. If foreclosures are more difficult and expensive to process, banks and investors could step up bulk sales of loans or foreclosure alternatives such as short sales.
  • Washington: This month, the Obama administration is set to issue an initial set of recommendations for how to remake Fannie Mae, Freddie Mac, and the broader mortgage market. Meanwhile, regulators also are writing new rules on provisions outlined in the Dodd-Frank Act that will clarify how banks must retain some of the risk on loans that are bundled and sold off as securities and define what constitutes a “qualified residential mortgage” that is exempt from such rules.
  • Lending Standards and Rates: The government continues to dominate the mortgage-lending landscape, with more than nine in 10 new loans backed by Fannie Mae, Freddie Mac, or government agencies such as the Federal Housing Administration. While some analysts have raised red flags over the FHA’s finances and say that loans with 3.5 percent down payments are leading the agency to take on too much risk, others worry about tighter lending standards that could further pinch demand.

Monday, January 10, 2011

What You Should Never Bring to an IRS Audit!

The most common mistake is providing copies of your other years’ tax returns. What is really does is expand your risk of needing to provide more information because it gives an auditor many things to analyze, like patterns of income and deduction amounts over multiply years.

So, why do people bring their previous tax returns with them?

Because the IRS auditors ask them to!

But, according to the IRS rules, you are only required to bring the information relating to the specific tax year that is listed in the audit notice. You are not required to provide information from any other year (except maybe carryover items) even if the auditor verbally asks you to do so.

If the auditor asks for a previous return, simply say, “I don’t believe that this relates to the audit notice and the tax year mentioned.” Almost always, that will end the matter.