A Great Savings Opportunity

300% return on your savings. WHAH??!! A typo? Too many zeros?


This is no joke. Utah Individual Development Account Network (UIDAN -- visit uidan.org) has a buying program that matches a buyers savings 3 to 1. The maximum amount they will shell out is $4,500. So if you save $1,500 (maximum savings) over a specified period of time, they will give you $4,500.

Unfortunately, this cannot happen instantaneously. There are some time constraints before you can get the maximum value of $4,500. The most you can deposit in the savings account per month is $62.50. This means it takes two years of using the account to get the maximum return. If a buyer saved for one year, the maximum the program would pay is $2,250 for your $750 savings ($62.50 x 12).

This program is perfect for an individual/family that is planning on buying a home down the road, maybe after finishing school or vocational training or waiting to repair your credit. While you are wating, simply save $62.50/month in this account and in two years, you'll have $6,000 (enough for the FHA required down payment for a $170,000 home).

The program is for first-time home buyers but that definition is broader than you might think. Anyone who has not owned a home in the last 3 years is considered a first-time home buyer. And since this program takes a year or two to really accumulate savings, people who may have just sold a home and don't plan on buying for a couple years, could really benefit. This is the perfect scenario for anyone who may have bad credit from a recent short-sale, foreclosure, bankruptcy etc. This is the greatest money saving vehicle while your credit is repaired.

The qualifications are as follows:

-Have less than $10,000 in total assets (one car is exempt)
-There is an income limit (you can't make a lot of money)
-You have to live in Utah
-You have to have a Social Security Number
-You have to be over 18
-Save $15 and no more than $62.50 per month
-Save in the program for a minimum of 12 and a maximum of 36 months
-Attend a personal finance and money management workshop series
-Complete asset-specific training for selected asset goal prior to purchase
-Regular contact with case manager
-Agree to address any credit issues that would inhibit you from purchasing a home
-Agree to abide by the program’s rules

To take the qualification quiz, go to:
http://www.uidan.org/quiz.aspx

The program also works for someone who wants to save for more education or for a business.

For more details on the program go to:
http://www.uidan.org/

Seven Steps to Home Ownership

I was recently invited to be the real estate agent keynote speaker at a home buying seminar at the University of Utah alongside my loan officer colleague, Nelson Barss. During the seminar, I was really impressed by the eagerness of people to buy a home. There seems to be an inherent desire in all people to own land and a home of their own.

I thought I would share the presentation. The following information from my presentation will be helpful if you are thinking of buying a home for the first time or if you are going into round 2 or 3 of homeownership. Who couldn't benefit from an occasional homebuying 101 refresher course?

Seven Steps to Home Ownership
Based of a Keller Williams Model

1. Decide to buy
2. Hire a Real Estate Agent
3. Secure Financing
4. Find Your Home
5. Make An Offer
6. Perform Due Diligence
7. Close & Move In


1. Decide to buy
When to buy?.... When can you afford?

Utah Starter Home:
List price: $150,000
Loan: $150,000
Credit Score: ~700 /Rate: 4.3%

$756 - Principle & Interest
$125 - Property Tax
$25 - Homeowners Insurance
$138 - Mortgage Insurance
Payment: $1,043/month

…$150,000 Home, Payment: $1,043/month

Median Salary
*UofU Grad Starting Median Salary: Yearly: $44,200
*according to Payscale.com, 2011-2012 payscale report

Monthly Income: $3,683
$1,043 payment is 28% of Your income

…$150,000 Home, $1,043 house payment is 28% of income

Debt Limits
Debt Limit for Borrower = 50%
Wise Debt Limit = 40% of Income

40% of $3,683 is $1,473
$1,473 for debts - $1,043 for house
$430 remains for other debt


2. Hire a Real Estate Agent
Who? Why? How Much $?


Who?
The buyer is the Hiring boss:
Hire someone with at least 2 years full-time experience
Many agents are part-timers with little experience or availability

Why? An agent is:
Market Analyst – Ensure you don’t overpay
Liaison – Lender, Title, Inspector, Contractor
Contract Specialist – Buying a house = Contracts
Negotiator – Knowledge of what’s negotiable
Trained Eye – Mold, Meth, Shingles, Appliances
Knowledge – Short sales, Foreclosures, etc.
Secretary – Scheduling, Research
Finder – Full-time hunter of homes

How Much $?
A buyer pays: $0.00 Zero
Seller’s Pay Commissions
Listing agent & buyer agent split the contracted percentage %
Commissions are not added to price
Prices cannot be higher than appraisal


3. Secure Financing


Loan Officer - Crucial:
Preapproves your loan (required for offer on home)
Helps determine your best mortgage option
Submits Purchase Contract to Underwriter
Gets appraisal & title commitment
Obtains funding for closing






4. Find Your Home
The Fun Part




Location Location Location
Wishlist: Analyze Values Needs & Wants

Establish a “Hotsheet” with your agent
Your agent will set up auto-emails of homes that match your specifications

Multiple Listing Service or “MLS”
www.utahrealestate.com Give your agent MLS listing #’s of houses you’re interested in and let your agent schedule multiple appointments


5. Make An Offer
The Nervous Part

Price—offer must reflect true market value of the home
Terms—address timing and financial considerations & what's included
Contingencies—“conditions” that allow you to opt out
Seller Concessions— common in a “Buyers Market” — Seller may pay closing costs (saving a buyer thousands)

Real Estate Purchase Contract (REPC)
Purchase Contract Approved by the State
Ensures you are protected as a buyer if drafted properly




6. Perform Due Diligence
Courting the Home


Property inspection - structural or hidden issues
Hire a home inspector
Cracks or crumbling in the foundation
Cracks inside the house over windows
Water stains in ceilings, floors, or walls
Faded or worn shingles
Mold or Meth issues


7. Close & Move in

Pre-closing responsibilities include:
Appraisal, title search, and title insurance.
Keeping yourself mortgage worthy!
Doing a final walk-through of home.
Countdown to closing includes:
Getting your settlement statement, certified funds, evidence of insurance, and transfer of clear title.

Interest Rates. Holy crap!

Interest rates cannot be talked about too much right now. When have mortgage interest rates ever been at 4% or less? How about, never! Such low interest rates means saving hundreds of dollars on your monthly mortgage payment when purchasing or refinancing a home, compared to any other time in the history of mortgage loans. If you are considering purchasing a home or even refinancing, NOW IS THE TIME!!

Starting in 2008, rates started to come down from an already, historically low rate of 5.5% or so and then we started to gasp, and gasp and gasp as rates plunged lower and lower and lower.

In 2009 I was sitting in a closing with clients and was blown away to see their locked in mortgage rate of 4.75%. A year later, a different set of clients who were buying a home locked in at 4.2%. A month later they are now at 4.1%. A 15 year mortgage can be locked in at 3.5%!!

What does does this mean for your monthly payment?

Here is an example of your monthly payment on a median priced, Northern Utah home with a historical rate, vs. the current rate:

-Median Priced home (Wasatch Front): ~$200,000

-Loan Amount after 5% down: $190,000

-Historical Mortgage Interest Rate: ~8%

Monthly Payment: ~1,400

vs.

-Current Mortgage Rate 11/08/2011: ~4%

Monthly Payment: ~$900

Savings: $500!!!

History is an indicator of what to expect in any scenario. Using this historical indicator you can expect that mortgage rates will swing back up toward the 8% range, eventually. When that happens, you can expect a payment on a $190,000 mortgage to go up $500.00 per month. Of course, the savings are greater as the loan amount increases.

I'll put this opportunity into perspective: Let's say you borrowed the $190,000 to purchase the median priced home and locked in your 30 year loan interest rate at 4%. As an opportunist of the market, you make your minimum $900 mortgage payment and go the extra mile by pretending you are paying the historically average loan interest rate of 8%. This means you apply an extra $500.00 toward the principle balance of your loan. In this scenario, you would pay off the thirty year loan on your home home in fifteen years!! So, just by paying what a historically average borrower would have paid on a $190,000 mortgage, you will pay off your mortgage twice as fast as they would have!

Opportunity knocks. Take advantage of this incredible market. I'm ready to help as your agent.

Great News for First Time Home Buyers

Utah Housing Loans enable first time home buyers, who have no cash savings, to buy a home. This is possible since Utah housing will lend a first-time buyer up to 6% to cover the down payment and closing costs.

Other programs to assist single parents and veterans are also available through Utah Housing.

I have represented many first-time buyers within the last few months who did not know that they could buy a home. They assumed that they did not have enough money to afford a down payment or closing costs. Often times, they did not even know that they could qualify for a loan! There are many loan programs designed to fit each individual buyers needs. You just have to go through the proper real estate channels to make your American Dream happen!

Do not let notions of a bad real estate economy dissuade you from buying a home. When all you hear is negative reports about real estate, it is usually the best time to buy. Buy low, sell high!

$8,000 For Down, Closing Costs or Interest Rate

Since the beginning of 2008, $8,000 has been available as a tax credit for first-time home buyers.

Opportunities keep getting better and better and better for first time home buyers. I wish I was a first-time home buyer right now!!

Home prices are low. They are at 2004 levels if not lower. It is an investors paradise right now. Oh, did I mention that interest rates are at record lows? So, as a first time home buyer, you are getting a rock bottom price and your borrowed money is at a sickeningly low interest rate.

3 Reasons to buy in 2009/2010

1) Tax Credit

If you are a first time home buyer who buys between January 1st 2009 and April 30, 2010, you will receive $8,000 after you file your 2009 taxes. This is a grant from the Federal Government that you do not pay back as long as you live in the home for at least three years.

This is a perfect option for a down payment. For example, if a buyer can borrow money from a family member of friend for the down payment, as soon as you file your 2009 taxes and receive the $8,000 credit, you can pay your family or friend back.

The tax credit would also be perfect for potential home improvements. For example, one of my first-time-home-buyer clients just purchased a home and are using the tax credit toward doing landscaping in the backyard of their new home. Upgrades such as counters, carpet, cabinets or finishing the basement would be perfect uses for the tax credit.

For a more extensive explanation of this tax credit, go to:

http://www.federalhousingtaxcredit.com/2009/faq.php

2) Short Sales

Some homes in Utah are now selling for hundreds of thousands of dollars less than what is owed to the bank (short sale). For instance, I just sold a 5,000 sq ft. new home in Farmington (built in 2007 and never lived in) that appraised in 2007 for just under $500,000. The builder of the home owed the bank $471,000 and had to sell. The bank agreed to sell the home for less than what was owed on the mortgage (hence "short" sale). I represented the buyers, who purchased the home in January, 2009 at an incredible $350,000.

Due to over-speculation from builders and bad loans on larger, second or third-time buyer homes, there is an over-supply of these homes on the market. This over-supply has driven prices down and has necessitated banks to take less than what is owed on the mortgage when the owner sells.

This situation is the perfect opportunity to buy if you purchased a smaller home (under 3000 square feet) a few years ago and are looking to upgrade. This is because the demand for smaller homes in contrast to the larger homes, has remained fairly consistent throughout the Wasatch Front over the past few years. Now is the opportunity to "buy low".

Obviously, this situation of over-supply and lower priced larger homes, is also a perfect for investors. If someone is looking for a fantastic investment, there has hardly been a better real estate opportunity than right now. Because of the tragic mortgage crisis, there is an increasing number of people who have defaulted on their loans (dinging their credit), lost their homes and have been forced to rent. These renters often have good jobs. And although they could not afford their very large mortgage payment, they can still afford semi-high rent. And in the 5 years it might take for these renters to get their credit back in shape (all the while renting from an investor), the home will no doubt bring a fantastic return upon sale in ~2014.

3) Interest Rates

Home buyers are now getting locked into loans at less than 5% & even 4%. Historically this is a dramatically low exception to the norm. Over the past 20 years, interest rates have averaged 7.68%

I will put the savings into perspective if you borrowed a home at the current interest rates, compared to the past 20 year-average interest rate:

Mortgage amount: $250,000 at 7.68% (past 20 yr. avg.)

-Monthly Payment (with no mortgage insurance) = $1,779

In contrast,

Mortgage amount: $250,000 at 4.9% (possible current rate)

-Monthly Payment (with no mortgage insurance) = $1,327

At the current 2009 rate, you would be paying $450 per month less than the past 20 year average. $450 per month!!

In short, real estate opportunities knock, whether you are a first time home-buyer, upgrading, or if you are an investor. If you are in any position to buy a home right now, you can't lose. Email or call me and I will help you find and offer on the best real estate deals in decades.

Real Estate

Increasing Population + Static Land Existence = Growing demand for land + decreasing supply of land = Real Estate is the most stable long term investment.

Land. pursuit of it, or the retention of it has been the spark of wars through all time. Rule of law protects your ability to obtain and retain property peacefully and legitimately.

If you own land, you are the king of your own domain. Don't we all want to be kings?

The founding fathers really believed that the inalienable rights of man are life, liberty and the pursuit of LAND. These renegade revolutionaries saw that a king of a nation inhibited their right to be an unfettered king of their own domain. But a government by, for, and of the people would allow each man to pursue his own kingdom and destiny. Hence, The U.S.A.

A good Real Estate Agent protects the pursuit of your most valuable material asset: your land. A good Real Estate Agent will ensure that your acquisition and retention of real property is legitimate and protected by law.