A Little while ago I began posting the Video series published by NAR on the REALTOR Code of Ethics.
One of the oldest Codes of Ethics in the United States, the Code is a living document which breakes the obligations of REALTORS into three categories, Duties to Clients, Duties to the Public, and Duties to Other REALTORS.
This Video continues the explanation of the First obligation of a REALTOR - the obligation of a professional to their Client. And talks about what happens after an agreement of sale is accepted. In Pennsylvania, the Agreement of Sale form adopted by the Pennsylvania Association of REALTORS addresses that responsibility.
The Video also talks about our obligation to avoid the unauthorized practice of Law.
Finally, the basic relationship of the REALTOR to the customer or Client is also addressed in this video - Enjoy!
Monday, June 30, 2008
A Little while ago I began posting the Video series published by NAR on the REALTOR Code of Ethics.
Saturday, June 28, 2008
Blogging is generally stressful as you try to think of new things to say and new ways to say them . But sometimes keeping up with your blogs can be quite a chore, and some of you may be aware that in addition to writing here, I write REreflections, and contribute to C21AgVoices, and AgentGenius, all different but interesting places to write and read.
That's where living in one of the oldest cities in the United States comes in real handy. If I've been busy in my real estate company all week, all I have to do is drop back and tell you more of the things that happened here first.
We already talked about some real estate firsts, so now let's talk about some historical firsts;
- 1766 - The first permanent theater in North America was started here
- 1769 The first life insurance society was started here
- 1773 - The American Medical Society was founded here
- 1776 -The Declaration of Independence was signed at Independence Hall
- 1777- The first flag for our new nation was sewn at Betsy Ross's House.
- 1784- The Pennsylvania Packet or General Advertiser, the first daily newspaper was published here
- 1792 The first Federal Mint was authorized here by Congress
- 1830 Saw TWO firsts -The first Penny Newspaper, named appropriately enough "The Cent" and the first successful Woman's Magazine, 'Godey's Ladys Book" published on Sixth Street above Chestnut
And with all of that happening, we hadn't even gotten to cheesesteaks, water ice, and soft pretzels.
A Home Equity Line of Credit is bank product that grants homeowners access to the equity in their home at anytime, usually using checks.
Often called a HELOC, these equity-based credit lines function very much like credit cards:
- The rate is adjustable, tied to Prime Rate
- There is a minimum monthly payment
- There is a pre-set spending/credit limit
But different from credit cards is that a HELOC is "guaranteed" by real estate and with real estate values in question nationwide, many banks are exercising a little-known clause in the HELOC contract.
With alarming frequently, banks are reducing the pre-set spending limits on their active equity lines. Via USPS, lenders are notifying homeowner with $100,000 HELOCs that their new HELOC limit is $25,000, for example. This move is part of a trend towards conservative lending that is a response to the too liberal lending policies that have led to the current issues in the credit industry.
And the banks aren't being discriminate based on payment history or local real estate conditions, either -- it's happening everywhere with equal force.
The good news is that banks will accept appeals on HELOC reductions on a case-by-case basis.
One way to appeal a HELOC reduction is:
- Call your lender's Customer Service line. Do not send an email.
- Politely ask why the HELOC limit was reduced. Listen carefully to explanation.
- Explain why you would like your HELOC reinstated. Acceptable reasons may include home improvement projects or improper home valuation by the lender.
- Be prepared to write a formal letter, if asked. Address the issues explained in #2.
Banks will typically not reinstate a HELOC if a borrower has been delinquent on payments, or lives in a severely depressed neighborhood. However, because lenders rely on computer models to assess risk, it's always a good idea to ask.
The key to the success or failure of your request may lie completely in the manner in which you approach the problem. Remember that the person you're speaking to in the bank may be able to help you, but they are probably not the person who instituted the policy, and its not a good idea to be too aggressive with them if you want their help. After all, its only human to want to help people that are nice to you or be less inclined to help those who are not. And in this case, the Human Element of an appeal may work in your favor.
Friday, June 27, 2008
Each month, researchers at The University of Michigan survey a small sample of the U.S. population about their thoughts on the economy -- is it improving, it is worsening, is it staying the same.
May's consumer confidence survey registered it's lowest reading since 1980 -- and for good reason:
But despite all of that, it appears that the American Consumer is taking the economy's hiccups in stride.
Last month, retailers around the country reported rising sales levels that doubled economists expectations. This isn't supposed to happen when consumer confidence is falling so fast.
But, a closer look shows that the retail sales data was led by discount retailers such as Target and Wal-Mart. In other words, consumers feel worse about the economy, so when they choose to spend money, they spend it on value items.
For home buyers, this should sound familiar because it's every real estate agent's mantra right now -- "there's a lot of good values to be had." It's why some homes are getting multiple offers within days while other languish on the market for months. And that's why I wrote a post a little while ago called "It's a Great Time to Buy Real Estate in Philadelphia". In our market in Pennsylvania and New Jersey, where prices are stable, and the amount of existing housing inventory is smaller then the national average, careful consideration of your pricing is crucial.
The housing market is showing signs of strength across the country, low consumer confidence notwithstanding. Every buyer is looking for a "good buy" and there's plenty of places to find them.
(Image Courtesy: Wall Street Journal Online)
Thursday, June 26, 2008
Most homeowners make four housing-related payments each month:
- Principal on a mortgage
- Interest on a mortgage
- Taxes on the real estate owned
- Insurance for the real estate owned
Collectively, these payments are known by the acronym PITI but don't let it fool you -- a homeowner's monthly expenses are still called PITI even if one or more of the elements doesn't apply.
For example, a homeowner with an interest only mortgage does not pay principal each month. And some homeowner's are not required to pay Insurance or taxes into an escrow account if they are borrowing from a smaller lender or are making a larger down payment.
Additionally, condo owners typically don't pay homeowners insurance -- they pay a monthly assessment and/or maintenance fees to an association instead, and a smaller condominium specific policy insuring the interior elements of their condo and the contents.
In some instances the Insurance company ir taxing authority may send the annual bills directly to the homeowner instead of to the lender. If your lender is escrowing these items, the bills must be forwarded to them. Otherwise your escrow account will accumulate, and you will, in effect be doubling your cost. Eventually it will be reconciled, but typically your money will have been held without interest during that time.
But regardless for what it stands, determining a comfortable PITI should be every homeowner's starting point when looking for a new home. PITI is the monthly housing cost, after all, and by knowing what fits in your budget, it's a lot easier to compare homes and their related expenses.
It's certainly better than asking the bank "how much home can I afford" -- all that's going to tell you is the P and the I. As a homeowner, you need to know all four.
PITI is most commonly pronounced pee-eye-tee-eye.
(Image courtesy: Contractor-Books.com)
Tuesday, June 24, 2008
From Ogechi Promise
Rue de Dulie 7th Avenue Plot 41 Williams Ville
Dear Prefered Partner
l am an orphan having $16,800,000 USD with a private trust company for safe keeping. I am willing to offer you 10% of the total fund if you can assist me transfer this fund to your country or any bank of your wish. I wish to invest in a stable economy. My interest is in companies with potentials for rapid growth in long terms.
I am interested in placing my fund in your country, if your country's bi-laws allow foreign investment. You can contact me for more details via my e-mail address with your reference. This fund I inherited from my late father who excels as a government contractor till his death by the rebels in 2006 in here in the country capital while I lost my mother at my early age of 2yrs this made me the only child of the family. Don't fail to indicate interest by furnishing me with your private details phone, fax, address, occupation and age.
Saturday, June 21, 2008
Who doesn't love it? Click Here to see why.
Just something for a Silly Saturday! Enjoy - I like the Manic Mode personally
Or here's a challenge from Bored.com I finished all 12 levels - DO I have too much spare time?
Let me know how you make out -
Wednesday, June 18, 2008
Flipper mailbox by Sheeshoo
No, its not about our favorite Dolphin friend, its about helping lenders get REO properties off their books.
Investors have long been a staple of the REO market, and professional investorsoften bought, remodeled and sold properties for a profit. The sale price to the consumer from the investor would generally be higher since the repairs or remodeling of the property actually increased the value of the property. The difference between the cost of the repairs and the increase in value was known as an entrepenuerial return.
When the market heated up some buyers bought property to re-sell to other less informed buyers for higher prices, and in some instances created ladder schemes where a group of individuals sold a single property to a sequence of fictitious purchasers, each time for a higher price until the final buyer just walked away from a mortgage that was well in excess of the value of the property. To stop this fraudulent practice, FHA established a 90 day waiting period on resales five years ago. This however had the unintended consequence of limiting the buyers available to lenders who were selling REO properties since they would usually try to resell the property as quickly as possible after the foreclosure.
With the change in the real estate market, the record number of foreclosures in many parts of the country , and the smaller pool of available financing, FHA is reversing their policies to help lenders get REO properties off their books. They recently announced that they were lifting their 90-day waiting period on resales (see Inman News story). This will help investors in their resale efforts, since the properties are usually completely remodeled, and would easily pass such restrictions, but lenders may still face some challenges on these properties.
If a property has minor deterioration, minor repairs might meet the FHA repair standards if the house is safe clean and sound. If the property needs substantial repair the lender will have to choose between selling the property to an investor or buyer with conventional financing and making repairs to the property. Since lenders are interested in making as rapid a sale as possible, and in a cost efficient manner, they may wish to makeminor repairs to meet lender requirements, or completely rehab a property to reach a broader buying audience and achieve a higher sale price.
It will take some time to see which participants in these transactions benefit most from this change - lenders, investors, or the end buyers., but without question this change is a move in the right direction, and is probably only one of many changes we can anticipate as the mortgage and real estate industries work their way through the current market.
Monday, June 16, 2008
Today, Inman News announced their 11th Annual Innovator Awards finalists.
In the category of Blogging the finalists were;
Big Picture Blog
Homegain Real Estate Blog
It is not amazing to me that Benn Rosales and Lani Anglin-Rosales achieved such recognition so rapidly, nor that Inman recognized the quality of the writers at AgentGenius. It does however amaze me that they managed to achieve such recognition with me as a contributor. Thanks to all of the other Geniuses for not letting me slow you down!
Saturday, June 14, 2008
Friday, June 13, 2008
Thursday, June 12, 2008
A little while ago I wrote a post about the Greater Philadelphia Association of REALTORS, one of the charter members of the National Association of REALTORS, both of which are celebrating their 100th Anniversary this year.
Even earlier I wrote another Philadelphia based post, talking about some of the Historical Firsts in our city, discussing the first Savings & Loan, their first mortgage, and possibly the first defaulted loan in the country. I enjoyed that so much, that I decided that this would be a great theme for GPAR's 100th year, so here is the second installment in that group of bogs. Hope you enjoy these random facts as much as I do.
In keeping with the theme of the blog, let's talk about the first Title Insurance Company in the United States which was founded here in 1876. Through successor companies, that firm ,known as Commonwealth Land Title (now owned by LandAmerica) still issues title insurance today!
Title Insurance is used to assure buyers that the title of their home is free and clear of liens and encumbrances at the time of purchase. During a re-finance, title insurance will often be required by the lender to protect their interest, assuring that they are the primary lien on the property.
The need for title insurance arose historically from the fact that traditional methods of conveying real property did not provide adequate safety to the parties involved. Until the 19th century, transferring title to real estate was handled primarily by conveyancers, who were responsible for all aspects of the transaction. The conveyancer conducted a title search to determine the ownership rights of the seller and any other rights, interests, liens or encumbrances that might exist with respect to the property, and, based on its search, provide a signed abstract (or description) of the status of the title. Although the conveyancer was generally not a lawyer, that individual was recognized as an authority on real estate law. The conveyancer only provided limited protection to the purchaser of real property.
In 1868, a lawsuit was filed was filed in Pennsylvania that would change the levels of protection the buyer expected in a real estate transaction.. In that case, a conveyancer named Muirhead, had searched and abstracted a title for a buyer named Watson. Muirhead chose to ignore certain recorded judgments (after consulting with an attorney) reporting the title as good and unencumbered. On the basis of that title abstract, Watson bought the property, but lwas later complelled to pay the liens that Muirhead had concluded were not a problem.
Feeling somewhat ill-used, Watson sued Muirhead , but the Pennsylvania Supreme Court ruled that there was no negligence on the conveyancer's part and dismissed the case. Watson, an innocent buyer had no protection.
The case of Watson v. Muirhead demonstrated that the conveyancing system could not provide safety to buyers ,so shortly after that court decision, the legislature passed an act "to provide for the incorporation and regulation of title insurance companies."
Since then, the title insurance industry has grown to become an essential component in the majority of real estate transactions in this country. Title services vary somewhat from one area of the country to the other, but the essential purpose is to assure a buyer that their transaction can be completed with efficiency, security and safety.
And it all started here in Philadelphia!
Friday, June 6, 2008
I notice that there are lots and lots of lists. AOL loves lists as does Forbes Magazine . So I get to know "The 10 Best Airports", "The 10 Worst Airports" (which of course include the three that I use the most - Philadelphia International, LAX, and O'Hare in Chicago), "The 10 Best Places to Retire","The 10 Best Places to Live", "The 10 Most Expensive Areas to Live", etc. etc. I guess this makes for a few reasons. . Forbes is a business magazine and these are all concerns of businesspeople. Lists are visual, and every list can provide a slide show of 10 city views along with a paragraph on why the city made the list, and of course there can be a cool map of graph to go with the data,
Where I do not expect to get my financial is Men's Health Magazine. I mean that's the place to learn about how to get a rock hard ab. Or how to eat well, and exercise properly without hurting yourself. Nonetheless, Men's Health was the source of a recent article entitled, "Is your City a Debt Trap?". In this article the magazine analyzed which Cities in the United States are the unhealthiest places to live financially.
Not Surprisingly, Las Vegas came in as the most debt ridden City in the United States, at Number 100. For the overall ranking, a lower ranking is better. That is, a city ranked No. 17 has less personal debt than one ranked No. 89. So the next thing I did was look at Philadelphia's ranking. Our fair city was ranked #77! Well, at least we aren't in the worst 10, but 75% of the cities in the Survey had less personal debt then we do.
For the individual criteria, a higher ranking is better. So a city ranked No. 92 for foreclosure has a lower foreclosure rate than a city ranked No. 3. Therefore our Credit Score(59) rating, Foreclosure rating (60) and Bankruptcy Rating(43) were all pretty decent.
Where we seem to have a problem is not in losing our housing or in being so debt burdened that we have to seek the protection of the courts from our creditor, but in Credit Usage(25), Credit Debt (28), and Housing Costs (26). The housing costs include rental expense, and it is these categories that weigh us in and weigh down our overall rating in this survey.
Housing Costs? I have a really hard time with that. Our real estate is, and has always been extremely affordable. I often travel to different parts of the country for meetings about the real estate industry, and in comparison with other major metropolitan areas, we seem to fare pretty well. We have a large stock of affordable row housing, semi-detached (Twin) homes. Even adding in pricier areas of the city and suburbs, I struggled here.
Then I looked at the 5 most affordable areas. Sioux Falls South Dakota, Fargo, North Dakota, Charleston West Virginia, Montgomery Alabama - With all due respect, these are not cities to compare to Philadelphia. While I'm sure that they have much to recommend them, I think that this is a survey that might have been better served if it was broken into different classes of cities. But its my fault - after all I am gettig my financial advice from Men's health.
But the bad news is that Philadelphians carry more debt then they should, and much of it is credit card debt or non-mortgage debt. A University of Pennsylvania study found that when a person's limit rises by $1,000, so does his debt--by an average of 13 percent a year. Even using less then half of your available credit can increase your debt substantially.
The good news is that we're not losing our homes or declaring bankruptcy. In other words, we borrow too much , but we're still doing OK making the payments. Maybe we just need to wait a little more before we make a purchase instead of seeking the instant gratification that a credit card can provide.