Investors

23February

HomeTelos and MCS partner to deliver efficient workflow solutions to shared clients

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The integration with Mortgage Contracting Services’ (MCS) automated workflow application will allow for streamlined communication between shared servicer clients and their investors.  The elimination of duplicate entry, combined with real-time submission of bids to investors, provides a more efficient and scalable workflow solution.  For the complete story, see MCS Joins Forces With HomeTelos.

For specific information about HomeTelos integration solutions, please call (214) 306-9099 or send email to sales@hometelos.com.

6November

Congess Extends and Expands Homebuyer Credit

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President Obama is scheduled to sign an economic package passed by Congress this week that will help millions of Americans who have lost jobs and have been unable to rejoin the workforce. It would also extend for seven months an $8,000 tax credit for first-time homebuyers that was enacted as part of the $787 billion stimulus package passed in February 2009 and is set to expire at the end of November 2009. The program would be expanded with a $6,500 credit for homebuyers who have lived in their current residences for five years.

The IRS reports that 1.4 million people applied for the homebuyer’s credit through August 2009.  The legislation would extend the program through June 2010, as long as the buyer signs a contract by the end of April 2010. It also offers a $6,500 tax credit to those who have lived in their current residence at least five years.

The measure doubles the income ceiling for eligible individuals to $125,000. Homes must cost less than $800,000 to qualify.

19October

4 Important Things You Should Know When Purchasing a Home

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Purchasing a home is one of the most important personal and financial decisions you can make.  If you are about to make this decision you should take the time to get educated about the process because there are a lot of legal and financial ramifications involved.  Here are four basic, but important things, you should know and do before signing a contract to purchase a home. 

1.  Choose the Right Lender and get Pre-Approved.  This has always been the most important thing to do before buying a home, but today it is even more important with all of the recent changes and restrictions in lending.  The bottom line is this:  if your lender cannot close your loan on the day of closing you cannot purchase your home.  Most importantly, if this happens on the day of closing, you will be in default and can be sued in a court of law.   All real estate contracts have default language and you should read those paragraphs and know the penalties for default before signing. 

When choosing a lender, the worst thing you can do is go online and choose a lender that you know nothing about.  The best thing you can do is ask your real estate agent to recommend a lender.  Good real estate agents have established relationships with two or three reputable lenders and they can give you a good referral.      

Choosing the right lender is also important because they can determine up front if you even qualify to purchase a home.  Otherwise, unless you have the cash to purchase a home, you cannot buy a home without a loan.  If you are not pre-approved you will waste your time and the agent’s time looking for a home.  Any good real estate agent will require a pre-approval letter, or proof of funds for a cash purchase, before they start showing your homes.   This is customary and reasonable. 

2.  Choose a Good Real Estate Agent.  Next to choosing the right lender, you should choose a good real estate agent to represent you.  This is always a tough decision because there are no real standards or criteria to follow.  You can often find a good referral from friends or family who have used them and had a good experience.  Try to choose an agent with at least 2 or more year’s experience.   The most important factor is their real estate education.  There are numerous opportunities for agents to learn but not all of them take advantage of those opportunities.  Try to choose an agent that is knowledgeable and education-minded.  It is also a good idea to choose an agent that is part of a larger brokerage firm; that way if legal issues arise they usually have a good support system for resolving issues or for mediation.  

3.  Termination and Contract Deadlines.   Once you are under contract you should always know your contract deadlines.  As a buyer there are usually several options for you to terminate the contract without losing your earnest money.  Once those deadlines have passed, you “may” still be able to terminate, but you will forfeit your earnest money, which in most cases can be $1000 or more.  A few of the basic termination deadlines are financing deadlines, the option or inspection period, receiving HOA information, the survey or the Seller’s Disclosure Notice.   The financing deadline is very important because after that time period passes, you cannot use financing as a reason to terminate – which is the most common reason buyers terminate.   Most financing deadlines are 14 to 21 days after the contract is signed and executed, whereas the contract deadline is normally 30 to 45 days after it is signed.  That means if your lender determines on day 30 they cannot close your loan, you could lose earnest money.  It is important also that you inform your lender of the financing deadline.  Always look over your contract and highlight the phrases that contain the words “… this contract shall terminate.”  That way you’ll know all you termination options.
 

4.  Know Your Cost.  Before signing a contract, always know what your out-of-pocket costs will be.  As a buyer, there are thousands of dollars of costs associated with a home mortgage and your lender, by law, is required to provide you with a Good Faith Estimate (GFE).  The Good Faith Estimate will break down all of the costs associated with your mortgage, as well as, show you what your monthly payment, taxes and insurance will be.  You should look over the GFE carefully and have your real estate agent look over it to make sure the costs are reasonable and customary.  In addition, you should look over it to see how much money you will be required to bring on closing day and most importantly, how much your monthly mortgage payment will be.  You should know these costs before you even begin to look at houses.  That way you will know if you have the cash necessary to purchase a home and most importantly, if you can afford the monthly payment.  During the pre-approval process you should tell your lender how much you can afford for a monthly payment and how much cash you have for a down payment and for closing costs.  Once your lender knows this, they can give you the price range of homes you need to look at in order to stay within that monthly payment.  As a buyer, it is your responsibility to know the costs and what you can and cannot afford. 

Purchasing a home is a big decision and there are numerous other things that are important as well, and trying to navigate the process on your own is not a wise decision.  Just as you would hire an attorney to represent you in court or a doctor to treat a serious illness, you should choose a real estate professional and a reputable lender to represent you and provide you with good professional real estate advice.   

12October

Broad Improvement in Home Prices

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According to the Case-Shiller Home price index, published 9-29-2009, there has been Broad Improvement in Home Prices.  Data through July 2009 shows that, although still negative, the annual rate of decline of the 10-City and 20-City Composites improved compared to last month’s reading.  This marks approximately six months of improved readings in these statistics, beginning in early 2009. F igures continue to support an indication of stabilization in national real estate values.  For more information visit the S&P/Case-Shiller Home Price Indices

5October

HomeTelos LEO: On the Cutting Edge of Something Great!

Comment from a Platinum performing agent in Los Angeles, CA:  “Nothing is forever in this business and your ability to adapt to the changing marketplace will ensure your survival.  I think the move to focus on LEO is a brilliant move.  I think your company is on the cutting edge of something great.  I don’t see REOs flooding the market.  I see a measured pace for REOs especially as the number of workouts and short sales continue to increase.  I think the LEO program will be a great success in California.  I recognize that it’s a privilege to work with your company.

25September

HomeTelos LEO Program Announcement

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HomeTelos LEO launched its pilot program in 4Q 2008.  The pilot results have been extremely encouraging.  Participating brokers have sold most of the properties assigned at current market prices, while averaging only 29 days on market!  Most exciting have been the positive responses we’ve received from homeowners, brokers and title companies who have experienced the successful results of a completed short sale.  Here are a few of their comments…

  •  “The homeowner was cooperative.  The property was well maintained, the pricing was in line with my BPO and, the sale occurred quickly…I think this program is great”!!! 
  • “Overall experience was very good. Communication from the HomeTelos team was great”!
  • “The ease in which we were able to get answers from the lender via HomeTelos exceeded my expectations”!

Expansion of the HomeTelos LEO Program is imminent, but for good reason lender resources have been focused on keeping people in their homes over the past few months, delaying the referral of many potential leads.  In the meantime HomeTelos plans to add an additional loan servicer and continue expansion of the program in the months ahead.

Working together, we will help families, lenders and our markets achieve better outcomes by avoiding foreclosures.  Visit www.hometelos.com for additional information on the HomeTelos LEO Program and pre-approved short sales.

31August

How To Determine The Market Value of a Home, Part 2

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In Part I of this article we said the market value of a home, like anything in the market, is determined by what a buyer is willing to pay.  Fortunately, in the real estate world there is a standard and proven method for determining “approximately” what that amount might be.  This method is called a “Comparative Market Analysis”, also known as a CMA. Understanding the CMA is essential for sellers as they decide what price to list their home and for buyers, as they decide what price to offer. 

            So,what is a comparative market analysis?  Let’s begin with the first word, “comparative”.  As you have probably noticed, most neighborhoods or subdivisions are made of a group of homes that are similar in age, construction, style and size.  You probably also noticed that each neighborhood is different and unique from another neighborhood and some are more desirable than others.  The first step in determining market value is finding and comparing homes that are “similar” to your home if you are a seller, or similar to the home you are considering purchasing, if you are a buyer.  From this point forward we will refer to your property as the subject property. 

            For example, if your subject property is a single story brick home with 1800 square feet, carpet in the living areas and bedrooms and tile floors in the kitchen, Formica counter tops in the kitchen, light fixtures and plumbing fixtures from the original construction in 1995 and the original standard builder fence that is now 14 years old, then you will need to find 3 or 4 homes that have recently sold in that same neighborhood that have those same amenities.  You will not want to compare it to a home that has been updated with granite counter tops, all new fixtures, wood floors and a new board-on-board fence.  If you do, you will find that the updated home sold for significantly more than the homes that are similar to your subject described above. This is a common mistake many sellers make.  They see an updated home in their neighborhood sell for $200,000 and think they can sell their home for the same price when their home is not really “comparable”. In reality, if they looked at homes that have recently sold that are similar to their home with no updates or improvements; they would discover those homes “sold” in the $175,000-$180,000 range instead of the $200,000 range.  So, it is very important to compare apples to apples when determining the market value of a property.

            Now that you know how to properly compare similar properties, you are ready to look at the actual “market data”, the next word in comparative market analysis.  You will need a real estate agent to assist you with this part, as well as, for preparing a Comparative Market Analysis, because they have access to the market data in the area of your subject property.  Most communities have a multiple listing service (mls).  This is the database system that contains all the properties currently listed for sale with a broker in an area.  Many online sites, which post for sale properties, sometimes pull their data from the local mls.  Once a property is sold and closed, the listing agent changes the status to sold and enters the sold price in the mls for that particular property.  Only real estate agents have access to the mls, therefore, only they have access to the sold data.  When a real estate agent prepares a CMA for you, it will usually be divided into four categories: 

1.    Similar properties that are currently listed for sale.  Actives.

2.    Similar properties that have recently sold.  Solds.

3.    Similar properties that have sales pending.  Pending or Option Contract

4.    Similar properties that have failed to sell.  Expired/Withdrawn/Cancelled. 

             All four categories are important, but the most important category of all is the “Sold” properties.  Comparing similar homes that have “sold” will give you an “average price per square foot” of what homes like your subject are selling for.  The price per sq. ft. is determined by dividing the sales price by the square footage.  For example, if a home was 2500 square feet and it sold for $200,000, then the price per square foot would be $200,000/2500 = $80 per sq.ft.  If another similar home sold for $195,000 and was 2400 sq ft, the price per sq ft would be $81. You then take the price per square foot of 3 or 4 similar homes that sold and average them, to get an “average price per square foot.”  Once you know the “average price sq/ft”, then multiply that number by the square footage of your subject.  This is the approximate market value.  One final note, you should only compare properties that are within 300 to 400 square feet of your subject, plus or minus.   

            Finally, the third word, “analysis.”  A real estate agent analyzes the CMA and all the variables to determine what they think is a good estimate of value for the subject property.  In their analysis, they consider many things like the number of days on the market, how many properties are currently listed, how many listings have expired and most of all, they make adjustments to the 3 or 4 sold properties chosen to make them like the subject.  The analysis part requires the skill of an agent because they know how to make those standard adjustments for amenities, and in addition, they know the local real estate market.  This is another good reason to always use a real estate agent when buying or selling a home. 

            This basic method of valuation is also used by appraisers as they determine the appraised value of a home.  If a home does not appraise for the loan amount, then a lender will not lend you the money to purchase a home for more than its “market value”.  One final important fact about a comparative market analysis is, it is an opinion of value; it is not an exact science.  If you ask three different real estate agents to do a CMA on a subject property, you will get three different opinions.  If they are good agents however, the opinions will usually be close in value.  

I hope this explanation of market value has been helpful.  The CMA gives you an idea of what buyers have been paying in the market, but as I said in Part I of this post, market value is always determined by what a buyer is willing to pay and what a seller is willing to sell for.  If you can understand this key element in the valuation process, you will be a much more educated and savvy seller or buyer. 

 

14August

How To Determine The Market Value of a Home, Part 1

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We are all aware of the recent decline in home values.  In fact, our current economic condition is largely a result of this issue, so determining the correct “market value” of a home is essential to both buyers and sellers.  No buyer wants to pay more for a home than it is worth and no seller wants to sell their home for less than it is worth.  In addition, lenders also need to determine the market value of a home before they provide the funds to purchase or refinance it.  As a former real estate agent, I have seen first-hand how market value is determined and exactly how it works.  It can be a wonderful thing for some and a devastating thing for another.  If I had to share the truth about how to determine the current market value of a home with a family member, my best friend or anyone that trusts me, I would tell them what I am about to tell you.

First and foremost, the market value of a home – like anything in the market – is determined by what a willing buyer is willing to pay and what a willing seller is willing to sell.  If you list your home for $200,000 and all the buyers in the market are only willing to pay $150,000 for it, then you will not be able to sell it for $200,000.

I was in the grocery story one day and the lady in front of me paid $16 for an organic watermelon.  I was stunned because I would never pay $16 for a watermelon; unless of course I was starving and the $16 watermelon was the only food item on the shelf, then I would gladly pay that price, or more.  The same scenario occurs in the real estate market.  Demand determines the price.  During the peak real estate market home prices escalated because there were more buyers in the market than homes.  Because demand was high, prices were high.  Today, demand is at an all-time low, so prices are low.  Many have lost their jobs, the economy is uncertain and fewer people are in a position to purchase a home. If you are a seller, this means that the market value of your home is not determined by what you paid, what you owe, what you want or what you need.  The value is determined by what a consumer is willing to pay “today”.

If the market value of your home has declined since you purchased it there is a good chance that you owe more on it than you can sell it for, i.e., you are “upside down” on your mortgage.  If you need to sell it, then you will either have to come to the closing table with cash to make up for the shortfall, work out a resolution with your lender, or face foreclosure.  If you are unable to pay for the shortfall then you could qualify for a “short sale” with your lender. HomeTelos works with various lenders in a new innovative, pre-approved program called the Loan Exit Option program (LEO) in which your lender may approve the sale of your home to a buyer for less than you owe and forgive the shortfall.  Read more about this program in my blog post titled HomeTelos LEO – Real Benefits for Homeowners, Agents and Lenders. 

In Part 2 of How to Determine the Market Value of a Home, I will share with you how you can determine the actual “value” or “price” you can expect to sell or purchase a home for.  This method is known as a comparative market analysis and it uses real market data to determine an approximate “price” or value of a home.  If you are a seller, understanding this market data analysis will help you not only know what price to list your home for, but ultimately, how to sell your home at the highest market price in the shortest amount of time.  If you are a buyer this same method will help you purchase the best house possible at the best possible price.  Until then, check out the additional helpful information on our HomeTelos blog. 

16July

HomeTelos LEO – Real Benefits for Homeowners, Agents and Lenders

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HomeTelos LEO (Loan Exit Option) has been working with qualified homeowners to eliminate their mortgage and provide an alternative to the traditional short sale since October 2008.  During that time, 33 properties have been successfully sold with the following feedback from participating listing brokers:

“It was a great program.  I hope to be able to participate in more transactions.  This is the way to do a short sale.”

“I was impressed with the fact that the timelines were adhered to.  The cooperation from the seller and that of HomeTelos was superb.   My transaction starting with the listing to the closing was very smooth.  I was able to price the property at market value, received four (4) offers and ended up closing it with a cash deal in a very short period of time.”

“This program is great.  The homeowners are happy the agents are happy and most importantly the buyers are happy.  Real Estate agents are pleased to show their clients these properties, they know it is priced correctly and their buyers will receive a quick response.  Local escrow and title companies are involved which make the other agents and businesses happy.”

“Excellent.  The homeowner was cooperative.  The property was well maintained, the pricing was in line with my BPO, the sale occurred quickly and closing happened on time.  I think this program is great!!!  It is significantly better than a normal short sale process.”

“I  would rate this program very high. I specialize in short sales and bank owned properties. My traditional short sales are taking on average six months to get closed. This home took less than ninety days to sell. The buyer’s agent knew the price was an approved price which helped tremendously, and I believe the bank will gain a better offer with an approved price up front. The borrower/seller was very cooperative. It was so nice to have the bank already have all of his financial paperwork and already have it reviewed in advance. “

“From a scale of 1-10.  HomeTelos is a “10”. The homeowner involvement is crucial for this program to work. If this home was not “prepped” for showing we would not have gotten an offer this quick.  The homeowner was on board with the program 100% from the beginning and that is what made it successful.”

It is obvious that the current “as is” short sale process needs improvement.  HomeTelos LEO has developed a process that eliminates many of the headaches and pitfalls encountered by real estate professionals and homeowners who are desperately searching for an answer to their housing situation. We’ll continue to keep you updated on the latest news from this amazing program and the response of the real estate community to an alternative that finally addresses their frustrations and need for an easier, timelier resolution to the short sale dilemma.